Lords Sitting of 20 July 1998

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Exeter.

Lord Clement-Jones
Timothy Francis Clement-Jones, Esquire, CBE, having been created Baron Clement-Jones, of Clapham in the London Borough of Lambeth, for life—Was, in his robes, introduced between the Baroness Hamwee and the Lord Razzall.

Lord Mackenzie of Framwellgate
Brian Mackenzie, Esquire, OBE, having been created Baron Mackenzie of Framwellgate, of Durham in the County of Durham, for life—Was, in his robes, introduced between the Lord Dormand of Easington and the Baroness Hilton of Eggardon, and made the solemn Affirmation.
Lord Lovat Lord Lovat—Sat first in Parliament after the death of his grandfather.

Palace of Westminster: Peers' Office Accommodation
2.50 p.m.
Lord Randall of St. Budeaux Lord Randall of St. Budeaux asked the Chairman of Committees:
What are the main impediments to providing reasonable accommodation for Peers in the Palace by October.
The Chairman of Committees (Lord Boston of Faversham): My Lords, the House has been increasing steadily the amount of space for Peers' office accommodation and negotiations are under way to acquire further accommodation for the House. However, the large increase in the number of Peers in the past two years has meant that the House has been unable to provide desks for all those who have requested them. However, I am hopeful that we shall be able to occupy new accommodation in 2000.
Lord Randall of St. Budeaux: My Lords, is my noble friend aware that many Peers now regard the problem of desks and telephones as very serious? It is causing all sorts of difficulties. It is felt that there is a desire for some short-term solution. Does my noble friend accept that problems of this kind tend to require a number of smaller solutions rather than one "big bang" solution? Is he further aware that there is a considerable level of concern that not all the options have so far been fully considered by the House authorities in order to minimise this wretched problem? Will my noble friend
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raise the matter with the House authorities and the usual channels with a view to examining all options in order to make as big a dent in the problem as possible? In addition, will he prepare a report as soon as possible after the House returns from the Summer Recess and place a copy in the Library?
The Chairman of Committees: My Lords, I am well aware, as are your Lordships' committees which deal with these matters, of the serious need for additional accommodation for your Lordships. I have to some extent to disappoint the noble Lord, Lord Randall of St. Budeaux. I cannot offer an immediate, short-term solution by October, but your Lordships' committees and the other authorities of the House have been searching for new accommodation, and, as some of your Lordships will know, accommodation has been found in Millbank, which is relatively close to your Lordships' House.
A point which will, I think, not be known to many of your Lordships is that at the last meeting of the Administration and Works Sub-Committee of your Lordships' House a working group was set up consisting of the usual channels, the Convenor of the Cross-Bench Peers and one or two others, assisted by Black Rod and the Clerk of the Parliaments, to go into the question of the allocation of the new accommodation which we hope will become available with the conclusion of the negotiations. I hope that we shall have adequate accommodation for your Lordships through the acquisition of the new accommodation in Millbank.
Lord Gainford: My Lords, can the noble Lord say whether there will be any extension to the car-parking facilities at your Lordships' House?
The Chairman of CommitteesMy Lords, strictly speaking, that is a different question. It is one of the two most thorny questions which exercise the minds of your Lordships, the other one being the Question on the Order Paper. It is a matter which is constantly being considered.
Lord Strathclyde: My Lords, is the noble Lord aware that on these Benches we have introduced the principle of desk-sharing? If other parties were to introduce that, the problem would be substantially alleviated. I do not say that the system is an overwhelming success all the time, but I believe that my colleagues behind me appreciate the effort that is made to ensure that we use the available space as wisely as possible.
The Chairman of Committees: My Lords, I am grateful to the noble Lord, Lord Strathclyde, the Opposition Chief Whip, for that point. That is a way of easing the accommodation problem to an extent, and I believe it is a practice that is followed in other parts of your Lordships' House.
I know there is concern in all parts of your Lordships' House that some of the desks that have been allocated through the various usual channels and the Convenor of the Cross-Bench Peers are not fully used.

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That is unfair to the usual channels, to the Convenor and to your Lordships generally. I suggest that that is something that needs to be looked at more closely in the hope of tightening up the system and relieving the pressure on desk space.
Lord Milner of Leeds: My Lords, can the noble Lord tell us how many desks are occupied by hereditary Peers?
The Chairman of Committees: My Lords, I shall need notice of that question. I shall write to the noble Lord with the Answer. I venture to observe that noble Lords who happen to be hereditary Peers play a considerable part in the service of this House and, speaking of them as, for example, Deputy Speakers, I do not know what I would do without them.
Lord Weatherill: My Lords, is the noble Lord aware that the noble Baroness, Lady Hylton-Foster, invented the system of desk-sharing, which works very well among the Cross-Benchers?
The Chairman of Committees: My Lords, I am grateful to the Convenor, the noble Lord, Lord Weatherill, for instancing yet another way in which the noble Baroness, Lady Hylton-Foster, has helped us in the service of the House.
Baroness Sharples: My Lords, could the noble Lord encourage noble Lords not to leave their papers and books on desks when they are absent for a number of hours?
The Chairman of Committees: My Lords, I am grateful to the noble Baroness, Lady Sharples. I think she overestimates the powers which I have. I have no doubt that others of your Lordships will have taken note of what the noble Baroness has helpfully suggested.
Lord Marsh: My Lords, would it be possible to ask the usual channels to consider whether this is the obvious, ideal way of dealing with a problem of this kind, in keeping with the dignity of the House?
The Chairman of Committees: My Lords, no doubt many of your Lordships will feel that the noble Lord, Lord Marsh, has made a valid point. I am, as always, at the service of your Lordships. I have to accept what your Lordships say and try to answer it if I can.

Social Security Benefits: Means-testing
2.57 p.m.
Lord Higgins Lord Higgins asked Her Majesty's Government:
Whether the statement made by the Minister of State, Department of Social Security in a broadcast regarding means-testing of social security benefit on Sunday 31st May represents government policy.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I confess that I am somewhat baffled by the noble Lord's Question. Of course, my right honourable friend Mr. Frank Field always speaks for the Government, although there may be occasions when the thinking of the rest of us has not quite caught up with that of my right honourable friend.
Lord Higgins: My Lords, I thank the Minister for that courteous and somewhat ambiguous reply. Is it not extraordinary that, since the Minister for Welfare Reform gave his Jonathan Dimbleby LWT interview, his pensions Green Paper has been delayed yet again by the Chancellor and that last week the Chancellor himself pre-empted a major part of it by announcing changes in the national insurance pension scheme which must involve means-testing, something which the Government said they would not do? More important, is it not clear that, following the evasive answers given by Mr. Field in the interview, the Government have now completely reversed their declared policy of paying for increases in the health and education budgets by cuts in the social security budget? Is it not the case that all three budgets are now planned to increase, with very serious implications for the PSBR, for interest rates, for employment, for the exchange rate and for the economy generally?
Baroness Hollis of Heigham: My Lords, I think there were nine questions there; I shall try to deal with the two substantive ones. The first question the noble Lord raised was whether the changes on pensions announced by the Chancellor, repeated on Friday in the Statement by my right honourable friend Harriet Harman, represented a change in the national insurance pension system to a system that will be means-tested. No, that is not the case. The national insurance basic state pension remains, as our manifesto made clear, the basic building block of our pensions policy. However, we are saying that pensioners need a second pension. It is desirable that that second pension should be an occupational or personal pension, but pensioners would have needed to start building that many years earlier when they were young people. We have the problem now that the poorest pensioners, mainly women, did not have that opportunity to work. We are seeking to ensure that they receive an increase in the income support premium and that they are guaranteed access to it. That was the purpose of the Statement last week: to ensure that the poorest pensioners see an increase in their pensions of a minimum of £5 per week.
The noble Lord asked also whether that represented a U-turn on government policy and whether we were failing to cut social security expenditure and divert it to health and education as promised. Again, that is not true. If the Government look at their expenditure figures, in the last Parliament social security expenditure rose by 3.9 per cent. annually. This year and for the rest of this Parliament it will rise not by 3.9 per cent., but by 2 per cent. annually; in other words, the rate of increase that was exponential under the Conservatives has been capped under Labour. What is more, the percentage of social security expenditure is falling from 12 per cent.

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to 11 per cent., falling also as a percentage of GDP. In relation to both questions asked by the noble Lord, he is incorrect.
Baroness Ludford: My Lords, another topic covered in Mr. Field's interview was benefits integrity in relation to, among other things, disability living allowance. Can the Minister confirm that in the Benefits Integrity Project, not a single case of fraud was found in relation to disability living allowance? Can she also give an assurance that the Government's action and rhetoric regarding benefits fraud will be matched by similar zeal in regard to tax fraud so that the poor do not feel that they are pursued while the rich are let off?
Baroness Hollis of Heigham: My Lords, the noble Baroness is broadly right about the BIP. The Benefits Integrity Project is designed to ensure that the right benefit goes to the right people. We know that with disability, fortunately, people sometimes get better and, unfortunately, sometimes get worse. The benefit therefore needs to be checked. We found that around 20 per cent. of all awards were incorrect; in other words, people got better and got worse.
The noble Baroness is right to say that virtually no deliberate fraud was found. Only 40 cases out of 95,000 were referred for consideration for possible prosecution. However, disability is not an either/or benefit; that is why we need continually to check entitlement. In relation to tax law, I share the view expressed by the noble Baroness that it is unreasonable for the state not to pursue those who evade, avoid or in any sense behave illegally towards their tax responsibilities while at the same time the state properly takes an interest in those who avoid, or improperly draw, social security benefits.
Lord Skelmersdale: My Lords, perhaps I may turn to pensions. At the moment there is the opportunity for the poorer pensioner to top up a pension income by bringing it up to income support levels, but few people do that. Now that the level for pensioners is to be increased, has the department made any estimate of what the take-up is likely to be?
Baroness Hollis of Heigham: My Lords, yes. Around 2.5 million pensioners are entitled to income support. The noble Lord is correct in that only 1.5 million take that up and 1 million—just over 40 per cent.—fail to claim the money that they should. As a result, on average they go without £17 a week. We know from our pilot scheme that we cannot wait for pensioners to initiate a take-up campaign; we must take the money to them. We are doing that primarily through data matching—for example, piggy-backing on the fact that they are often claiming housing or council tax benefit—and through personal advisers and the work of voluntary agencies. At the moment there is around 60 per cent. cash compliance. We hope to achieve 85 to 90 per cent. and that will be a reasonable success measure. Of course, if we can achieve higher than that, we shall be delighted.

Prison Population: Expenditure
3.3 p.m.
The Earl of Longford The Earl of Longford asked Her Majesty's Government:
What is the planned expenditure in real terms per prisoner for 1998–99 compared with that in 1995–96.
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, planned current expenditure in 1998–99, including the additional funds which my right honourable friend the Home Secretary announced in February, is forecast to be £23,933 per prisoner at today's prices, on current population projections. That compares with £25,752 in 1995–96. Converted to real terms, at 1992–93 prices, the figures are £20,494 in 1998–99 and £23,987 in 1995–96.
The Earl of Longford: My Lords, I understand that an important Statement is to be made tomorrow. In advance of that I can only say that, if some increase is projected, everyone who cares about the rehabilitation of prisoners will sing a song of joy for the sinner who repenteth. When this all-important Statement is made tomorrow will there be some repudiation of the Government's policy of cutting the Prison Service, including the education and probation services? At a time when the prison population is increasing greatly will that policy be totally repudiated?
Lord Williams of Mostyn: My Lords, my noble friend is correct that it would not be proper for me to attempt to anticipate anything that is to be announced by my right honourable friend Mr. Straw within the next few days. We are looking to improvements; for instance, we shall be looking to increase the hours per week spent in purposeful activity from 22.5 to 24. Targets have been set. Plainly, the situation is not satisfactory at present. The noble Lord is also correct in that on Friday, 17th July, we saw our highest ever prison population, standing at 66,102.
Lord Quirk: My Lords, does the Minister agree with Sir David Ramsbotham in his latest annual report on the vital importance of education for the prison population if we are to have any hope of rehabilitating prisoners? Does he further agree that, in view of the very welcome £19 billion extra money for education announced last week and given the desperately low levels of education among prisoners—two-thirds are sub-literate and sub-numerate—it would be nice if a due proportion of the new money could be ring-fenced for education in the prison population?
Lord Williams of Mostyn: My Lords, again, perhaps I should not anticipate the precise terms of what may be stated. I entirely agree with the point made by the noble Lord, Lord Quirk, that low levels of education lead to low levels of self-esteem and therefore low levels of opportunity or prospect of work on release. It is not simply academic education at which we need to look; we need to look at, for instance, the useful pilot scheme on welfare to work, which properly lays stress on

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employment opportunities on release rather than simply the acquisition of academic qualifications which may be inappropriate for some prisoners.
Lord Dholakia: My Lords, does the Minister agree that non-custodial alternatives are better forms of sentencing disposal? Does he also agree that we remand too many people in custody; that mentally ill offenders should not be in prison; and that there are better ways of dealing with people for non-payment of fines than sentencing them to a term in custody? Are not those the categories of people that should be seriously looked at so that, to an extent, we can reduce the extremely high prison population?
Lord Williams of Mostyn: My Lords, I gave the precise figures of the prison population, as I always do on these occasions, despite the fact that they make gloomy reading. Undoubtedly, non-custodial alternatives are extremely important provided that they are constructive and have public support. Public confidence in the judicial system is absolutely vital. It is commonplace to observe that there are too many people in prison. Sometimes the difficulty is in knowing which people in prison ought not to be there, which is a serious and fundamental question.
Baroness Anelay of St Johns: My Lords, will the Minister confirm the evidence in the latest Prison Service business plan that, in terms of running costs, privately-managed prisons are up to 15 per cent. cheaper to run than those in the public sector—to the same standards, of course? What plans have the Government to develop private sector-run prisons, or do they intend to stand by the Home Secretary's promise made to prison staff before the general election that privately-managed prisons will be taken back into the Prison Service as soon as contractually possible?
Lord Williams of Mostyn: My Lords, undoubtedly, in some circumstances, privately managed prisons may offer a cheaper regime. It is not a perfect equation because, for instance, one wants to look at the higher cost of high security prisons which will, in the nature of things, be extremely expensive to run. Two DCMF competitions were launched in 1997–98; the first is at Agecroft and the second at Pucklechurch. Both prisons are planned to open in 1999. The second competition is for two 600-place prisons, one at Marchington in Staffordshire and one at Onley near Rugby. Those prisons are planned to open in the year 2000.
Lord Hunt of Kings Heath: My Lords, does my noble friend agree that one call on any extra resources for the Prison Service would be funding the transfer of the prison medical service to the National Health Service, thereby improving the standard of medical care?
Lord Williams of Mostyn: My Lords, that alternative has certainly been put forward in your Lordships' House on a number of prior occasions. There is some virtue in it. Equally, some well-informed minds
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have the view that a global national health provision in the particular circumstances of the prison estate will not always be appropriate.

The Global Environmental Facility
3.10 p.m.
Lord Jenkin of Roding Lord Jenkin of Roding asked Her Majesty's Government:
Whether they are satisfied with the progress of the Global Environmental Facility; and what is their response to the criticism from developing countries that the facility ignores the most crucial issues affecting the third world.
Lord Whitty: My Lords, we are satisfied with the general progress of the Global Environmental Facility so far and strongly supported its recent replenishment and related actions to improve its work. It has to be recognised that the GEF has a particular role—to help developing countries and countries in transition play their part in global environmental issues such as climate change and the loss of biodiversity. It does not seek to address national environmental issues. That is why our contributions to the GEF are separate from our development assistance which focuses on the national development priorities of poorer countries.
Lord Jenkin of Roding: My Lords, is the Minister aware that an independent report produced by 25 independent consultants, which was considered at the Delhi conference in April, made some fairly strong criticisms of the way the facility is being run and suggested that some projects have been misconceived and misdirected? Is he further aware that the report suggested and the conference accepted that GEF activities should be based much more on national priorities and that the facility should promote genuine country ownership of projects and should incorporate consultation with local communities and the involvement of NGOs? Does the Minister accept that those are serious criticisms? Will the Government use their influence to try to persuade the facility that it should move in that direction?
Lord Whitty: My Lords, we are well aware of that report. The council considered both the independent report and the report from the agencies—the World Bank and so on—which carry out the Global Environmental Facility. They indicated that there were problems in some of the projects undertaken under GEF auspices. On the biodiversity projects, one figure suggested that roughly 12 per cent. were unsatisfactory. Of course, put another way, that means that 88 per cent. were progressing satisfactorily. We take these criticisms seriously but we have to recognise that the role of the GEF is incremental, directed at global environmental concerns. Some of the criticism—certainly the press criticism—has failed to recognise that difference.
Lord Kennet: My Lords, does the Minister agree that there is no necessary link between the two prongs of the

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noble Lord's supplementary question? Would it not be perfectly possible for the GEF to continue to direct itself to global concerns, which it was set up to do, and yet at the same time to listen a little better and to listen a little lower down the heap on each specific project in each specific country?
Lord Whitty: Yes, my Lords, some of the recommendations of the two reports to which I referred are in that direction. The council has accepted many of those recommendations. An action plan is now being drawn up which will be considered for full implementation in the autumn.
Lord Beaumont of Whitley: My Lords, is the noble Lord aware that the 12 per cent. figure which he quoted of unsatisfactory projects comes from the internal report and that much more dissatisfaction is being expressed by people looking on from outside? With regard to the final question asked by the noble Lord, Lord Jenkin, will the Minister say how the Government propose more thoroughly to involve NGOs so that they can use their expertise more directly?
Lord Whitty: My Lords, the recommendations to which I referred in response to my noble friend Lord Kennet involve closer co-operation lower down the line, including with NGOs, which are already making an important contribution on many of the GEF projects. With regard to the criticism, there was an independent report and an internal report, both of which pointed to some deficiencies. However, some of that criticism—certainly some of the criticism which followed in the press—is due to a misunderstanding of the role of the GEF itself.
Lord Campbell of Croy: My Lords, in his first reply the noble Lord appeared satisfied with the progress made since the noble Baroness, Lady Symons, replied to my questions on this subject a year ago. However, does he sympathise with the dissatisfaction expressed by some of the developing countries concerned, in particular that the individual interests of countries do not appear to be taken fully into account?
Lord Whitty: My Lords, in part I sympathise with that and in part the action taken will be in order to involve developing countries to a greater extent and, indeed, down the line to local communities. However, some of the criticism is because of a misunderstanding of the role of the GEF and what it is there to fund.
Lord Nathan: My Lords, can the Minister advise us as to whether he is satisfied with the extent of the Government's influence over the policy of the Global Environment Facility and how they exercise that influence?
Lord Whitty: My Lords, the British Government are one of the 30 or so members of the council of the GEF. We are satisfied that we have strong influence. We
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accept that some of our expertise could be brought to bear on some of the criticisms that have been voiced in these reports; and we shall do so.
Lord Lucas: My Lords, does the noble Lord agree that one of the lessons to be drawn from some of the projects which have not done so well is the importance of doing the science beforehand so that one can accurately determine what should be done and measure what has been achieved afterwards? Could not this lesson apply equally to the DfID, which is presently reducing rather than increasing its spending on science, on global positioning and on other such data?
Lord Whitty: My Lords, I think that that criticism applied to a few of the projects that were conducted under GEF auspices. I do not accept that that in any way cuts across the priorities which the DfID has enunciated in its White Paper and which have received general support in development agencies both here and in developing countries.
Lord Jenkin of Roding: My Lords, in view of the criticisms that have been directed at the facility from all parts of the House, I hope that the noble Lord may perhaps reflect on his initial Answer in which he declared himself satisfied with the work and recognise that there are indeed shortcomings here which need to be addressed.
Lord Whitty: My Lords, I thought that both in my first Answer and in my subsequent answers I indicated that I was very satisfied with the general progress of the GEF but that there were serious concerns which needed to be addressed. If anything, it shows that the monitoring process of the GEF and of the agencies is working in that it throws up these difficulties. We are determined, through the council and directly, to ensure that these shortcomings are addressed.

Business
Lord Carter: My Lords, at a convenient moment after 3.30 p.m., my noble friend Lady Hayman will, with the leave of the House, repeat a Statement that is to be made in another place on the Transport White Paper: New Deal for Transport. This will be followed by my noble friend Lady Symons of Vernham Dean, who will, again with the leave of the House, repeat a Statement on an International Criminal Court.

Statute Law (Repeals) Bill [H.L.]
3.18 p.m.
Read a third time.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I beg to move that this Bill do now pass. I am sure the House will wish to join me in expressing appreciation for the work on this Bill both of the Law Commissions and also of the noble and learned Lord,

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Lord Clyde, and the other members of the Joint Committee on Consolidation Bills. As the noble and learned Lord has said, the Bill produces a welcome thinning of the statute book.
In its report to the House the committee suggested that greater use should be made of provisions repealing superseded legislation in particular Bills before Parliament and that this would reduce the need for general Bills such as this. I agree. It would undoubtedly be desirable for every Bill to repeal material that it renders obsolete. In practice, however, this is not always possible because there is often insufficient time to do the necessary research. This is particularly the case where provisions which are spent, as opposed to provisions which are clearly replaced, are concerned. But our policy of consulting on draft Bills should improve such technical aspects as repeal provisions and I have certainly taken note of the Joint Committee's report.
Moved, That the Bill do now pass.—(The Lord Chancellor.)
Lord Peyton of Yeovil: My Lords, before the noble and learned Lord puts the Question, perhaps I may make two comments. Some of your Lordships may not be aware of the extent of the noble and learned Lord's achievement in cleaning up the clutter of the statute book. I refer particularly to the first two measures involved. The first dates back to 1533 and an Act concerning the attainder of John Wolfe, his wife and others. The second, which is only 280 years out of date, refers to an Act to inflict pains and penalties on Francis, Lord Bishop of Rochester.
I am sure that your Lordships will now appreciate the extent and value of the work achieved by the noble and learned Lord on the Woolsack.
There is just one question that I would wish to ask him. Both of these measures are repealed as they apply to the Isle of Man. I wonder what is peculiar about the Isle of Man in this context. I would very much like to know whether these measures were repealed as regards the rest of the United Kingdom before this or whether they remain extant on the statute book. In that case I suggest that it is time they were got rid of.
The Lord Chancellor: My Lords, in the interests of avoiding any offence to the Isle of Man, I had better write to the noble Lord.
On Question, Bill passed, and sent to the Commons.

Sexual Orientation Discrimination Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

National Minimum Wage Bill
3.22 p.m.
Report received.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 1:
After Clause 1, insert the following new clause—
EXCLUSIONS
(" .—(1) If it appears expedient to the Secretary of State, he may, by order made by statutory instrument, provide for the total or partial exemption from the provisions of this Act of—

(a) any area, sector of employment, trade or industry;

(b) undertakings of different sizes;

(c) persons of different ages; or

(d) occupations or categories of persons.

(2) The power conferred by subsection (1) includes power to make such incidental, supplemental or transitional provision as appears to the Secretary of State to be appropriate.
(3) The power of the Secretary of State to make an order under this section includes the power to vary or to revoke its provisions or to limit its operation for a specified period of time by means of a further such order.").
The noble Baroness said: My Lords, in moving this amendment I shall speak to Amendments Nos. 6, 8 and 10. I find myself in the strange, and possibly unique, situation of proposing, as an Opposition spokesman, that the Secretary of State should have more powers than she is asking for in the Bill—indeed, powers that she is positively trying to deny herself. In Clauses 2(7), 3(3) and 4(2), she absolutely declines the discretionary power to make exceptions to the national minimum wage in cases of different areas, sectors of employment, undertakings of different sizes, persons of different ages and persons of different occupations.
In fact, the whole of the Government's philosophy is contained in the Title, the National Minimum Wages Bill. The Minister confirmed that to me in reply to a question I posed when he made a Statement about the report of the Low Pay Commission on 18th June. That is because of what they said in their party manifesto. What it amounts to is that, in the interests of political dogmatism, the Government are denying themselves a safety net in case anything goes wrong with their theories. The trouble is that it will not be the Government who actually need to use the safety net, but the people whose jobs and businesses may be ruined by the national minimum wage as it applies to them.
As I pointed out in the debate on Second Reading, the United States of America, which is held up by the Government as the vanguard of the minimum wage, allows many exceptions which, so far, the Government have refused to agree to. Again, in his reply to another of my questions, the Minister conceded that there were exceptions to the national minimum wage in the United States of America for small businesses whose annual turnover was less than 500,000 dollars. He said that this exception did not apply to businesses engaged in, "interstate commerce". He claimed that it meant the exemption is much narrower than it may appear. Much narrower? I wonder how many flower shops or hairdressing salons are engaged in interstate commerce.

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In any case, a narrow exemption is undoubtedly better than no exemption at all. European countries also allow exceptions depending on their national circumstances and, as I understand it, they are frequently lobbied to allow derogations, sometimes not just unilaterally by employers.
As regards this country the concept of a national minimum wage is a new one, being far removed from the old Wages Council orders. During the passage of this Bill through the other place the Government made concessions from their original concept of absolute universality with no exceptions. Share fishermen have been excepted before what is left of our fishing industry sets sail for more congenial waters. The Armed Forces have been excepted, not only because it would be impossible to define how long, say, a soldier was actually working, but more importantly, the Treasury discovered that the wages bill for the Armed Forces was likely to double.
Lastly, the Secretary of State has, somewhat grudgingly, taken a discretionary power to exempt persons under the age of 26. I say "grudgingly" because instead of biting the bullet and simply making the exception, she has merely given herself the power to do so and even then it is hedged around with the unnecessarily restrictive conditions contained in Clause 4(2), which is one of the provisions I am now seeking to remove.
The minimum wage being a new concept, it is possible that the Government may come to realise that in some respect or another they have made a mistake. I realise that with the atmosphere of omniscience, coupled with the mantra of "We have a mandate" that currently pervades the Government, this is something that they may not yet realise. Indeed, the noble Lord, Lord Clinton-Davis, at Committee stage said, in replying to Amendment No. 48 that he spoke,
"as a Member of a Government with unshakeable confidence in its own infallibility".—[Official Report, 11/6/98;col. 1270.]
Before the noble Lord rises, I hasten to acknowledge that this was as a result of some provocation from me and was intended, of course, to be a joke. But I really do believe that it was one of those jests in which many a true word is spoken. I really believe that the Government's obstinate refusal to consider many of our amendments is based purely on the same "We-know-best" attitude which has led to the complaint that they are trying to create a nanny state.
The fact is that, so far as the Opposition are concerned, the whole Bill is a mistake. However, since we accept that the Government are entitled to have their Bill, my present amendments seek to protect the Government and, more importantly, employers, employees and the economy alike from the folly of not having a discretion should unforeseen circumstances require it.
I am not going to take up time at this moment by giving hypothetical examples. However, when I speak to Amendment No. 4 I shall tell your Lordships about a whole industry, employing some 3,000 staff and providing important facilities for 200,000 children every year, and at the same time making an important contribution to the deprived communities in which those businesses are situated. That industry and all its facilities
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will be totally destroyed unless the Secretary of State agrees to adjust some of the administrative provisions in the Bill. It is not for me to argue that industry's case—and certainly not during the passage of this Bill.
Let us assume for the sake of argument that an unanswerable case is presented to the Secretary of State for some exception of some sort to the comprehensive, sweeping and universal rule that is currently proposed. That case might be in favour of any of the categories covered by this amendment. What will happen?
The Secretary of State will say to her postulants, "Yes, I entirely agree with you, something should be done, but unfortunately my hands are tied, because the Act does not give me powers to do what we both agree is right in this case. It will take an amending Act of Parliament, and unfortunately the legislative calendar is full up for years to come". In other words, the Secretary of State has a perfect get-out from doing anything, even if she conceded that something needs to be done. In fact, she is erecting a sign saying, "Don't bother me with your problems because I can't help you".
I do not know the philosophical reasons that motivate the Secretary of State declining to give herself the power to adjust the working of the Act in the light of future experience or changing circumstances. It cannot be that she believes that what she is proposing is so perfect that, like the Laws of the Medes and Persians, it is to be unalterable. It cannot be that she believes that she is possessed of power to see into the future, and knows that there will never be a need to modify the parameters of the national minimum wage. It surely cannot be that her attitude is that, no matter how cogent the arguments may be for introducing some flexibility, no matter how much she agrees that there should be a variation—permanent or temporary—in a particular case or cases, she positively does not want the power or discretion to act.
The Opposition feel that the Secretary of State should have the power to correct anomalous or harmful situations should they arise at any time in the future, despite all the Government's confidence that they cannot and will not. The discretionary power—it is only a discretionary power—that we wish the Secretary of State to have is to make exceptions, not by new primary legislation, but by statutory instrument. The power we propose is so flexible that it can be limited in time, or be subject to further amendment or, indeed, revocation by the Secretary of State.
More important than all of this is the fact that this is simply an enabling power. It means that the Secretary of State will actually have to take the time to listen to those who wish to present a case to her, but that duty goes with the red boxes and the ministerial car. You do actually have to listen to what people are saying to you. You do have to listen to points of view that do not emanate just from Transport House.
Perhaps the Secretary of State might consider, for example, the articles that appeared in the Sunday Times on 31st May, reporting that research by the Forum of Private

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Business showed that a national minimum wage of £3.60 an hour would have a severe effect on small businesses. I quote:
"Worst hit would be sectors such as retail, catering and care homes, and regions such as the North, Northwest and Southwest.
It will affect the ability of 63% of small firms in the north to take on workers, compared with 15% in London.
It is bound to affect small firms whether by reducing the number of new jobs that would be created or by shedding jobs".
Small firms are the engine for the creation of new jobs. Small and medium-sized companies, employing fewer than 250 people are estimated to provide 10 million jobs and to generate 40 per cent. of the national total of sales. Large firms, including many members of the CBI, have been shedding jobs for years.
The Secretary of State may not agree with one word of that survey. She may also not agree with the report published in June by the House of Commons Select Committee on Trade and Industry, which has severely criticised the Government's failure to give proper support for small businesses. In fact, her spokesman arrogantly dismissed the all-party report by saying,
"the Committee is entitled to its views".
Nevertheless, in case the Secretary of State is wrong about the need for exemptions to be made from the national minimum wage and the Forum of Private Business' survey is right, she needs the power to correct the mistake that we feel she is making.
The Secretary of State does not have to exercise her discretion if she does not choose to do so. We find it inexplicable that she is adamantly against having the right to adjust the national minimum wage if circumstances demand it as, indeed, happens in other countries where there is a minimum wage. There is no reason except, as some people might suspect, a deal with the TUC that there will never, never, never be any exceptions, no matter what the circumstances.
There is, however, no justifiable reason why the Secretary of State should impose this self-denying ordinance on herself, by declining the power to think again without having to come back with an amending Act.
Finally, before leaving this amendment, I would like to remind the Minister that throughout the Committee stage he and his noble and learned friend the Solicitor-General repeatedly professed the Government's desire for what they called "flexibility" in the operation of the Act. In fact, in rejecting no fewer than six amendments, they did so on the grounds that the Bill as drafted provided greater flexibility. The noble Lord, Lord Clinton-Davis, actually used the word "flexibility" on five occasions; and the noble and learned Lord the Solicitor-General used it twice.
In this amendment, which must be the mother of all Henry VIII clauses, we propose that the Secretary of State shall have the power to amend the Act by order in no fewer than five separate ways—one for each of the flexibilities sought by the noble Lord, Lord Clinton-Davis, if, but only if, she chooses to avail herself of it. That is real flexibility. So much flexibility,
588
in fact, that as well as being the Ministers' "right honourable friend", in the words of a well known credit card advert, she will also be their "flexible friend".
I now turn briefly to the other amendments in this group, Amendments Nos. 6, 8 and 10, which seek to delete the provisions of Clauses 2(7), 3(3) and 4(2) respectively. Those are the provisions which inhibit the Secretary of State from exercising any discretion over the application of this legislation. If the proposed new clause to which I have just spoken—that is, Amendment No. 1—is accepted by your Lordships, each of the subsections to which I have just referred will be inconsistent with it and will need to be removed. I beg to move.
3.30 p.m.
The Chairman of Committees: My Lords, as Amendment No. 6 has also been spoken to, I must point out to your Lordships that if that amendment is agreed to, I cannot call Amendment No. 7.
Baroness Turner of Camden: My Lords, the noble Baroness referred to "flexibility". Is she seeking flexibility for employers simply to employ vulnerable people as sweated labour? Is that what the noble Baroness is seeking? This is a human rights issue.
Baroness Miller of Hendon: My Lords, the noble Baroness should know me better than that and should know that I am seeking flexibility—
Baroness Turner of Camden: I hope so!
Baroness Miller of Hendon: My Lords, the noble Baroness says that she hopes so. We are seeking some flexibility for certain circumstances that may arise in the future. At the moment, for example, it seems that the manufacturing sector of the economy is suffering badly as a result of the high value of the pound. I am not saying that that in any way relates specifically to what we are considering now, but it could be that within two or three years the small business sector is suffering equally badly although perhaps in a different way.
The Secretary of State—the President of the Board of Trade—does not have to exercise the discretion. It is up to her. It is not up to the employers. Indeed, that is exactly what we are seeking. We are seeking to give the Secretary of State the power and the discretion, if she thinks it fit—not if the employers think it fit. The noble Baroness, Lady Turner, shakes her head, but we are seeking to give the Secretary of State a discretionary power which the Secretary of State may exercise, should she decide that she needs it. Nobody else could apply to use the discretion because nobody else has the power.
Lord Razzall: My Lords, as the Minister is well aware, the Liberal Democrat Benches have taken a fundamentally different approach to this Bill from the Opposition. We believe, in common with the Government, that it is time for the cowboy practices of many employers to be put to an end by the operation and implementation of minimum wage legislation. We have disagreed with the Government on one or two areas. We have consistently disagreed with the

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Government about the possibility of allowing regional variations to the national minimum wage, as happens in a number of other countries. I accept that as to the first stage of the minimum wage the fox has been shot. The Government were elected on a manifesto which committed them to a national minimum wage. Regional variation has been examined to some extent by the Low Pay Commission. The report of the Low Pay Commission—I commend it to noble Lords, if they have not already read it—deals in considerable detail with the arguments for and against regional variation. I accept that the case for regional variation has not been made out. However, I support the noble Baroness, Lady Miller of Hendon, in that I am not entirely certain why the Government wish to restrict themselves in future.
We part company with the Government on the question of what happens if, for example, in the year 2000, 2004 or 2008 the economic circumstances of this country change, bearing in mind the significant alteration in the economic structure of this country that may result from our entry into European Monetary Union. Is it to be said that if the Low Pay Commission in future recommends a regional or sector variation the Government must promote primary legislation to achieve that? Do the Government have to have a new Bill to obtain a minimum wage with the variations that are contemplated? I do not believe that it is in the interests of any party in government in favour of the concept of a minimum wage to constrict themselves to such an extent that they are forced to seek primary legislation to introduce what at that stage will be regarded as a detail. For the reason that we do not want the Bill to be prescriptive but want to give it the widest possible powers in future. Although not for the arguments advanced by the noble Baroness, we support this amendment.
Lord Davies of Coity: My Lords, I believe that in tabling this amendment which effectively introduces an exemption, the noble Baroness poses the wrong question. Only a minority of workers in this country suffer low pay to the extent that they require a national minimum wage. The Low Pay Commission has examined all the circumstances and made recommendations.
It is not a question of ensuring that small businesses are propped up by low wages. The exercise is to ensure that those in employment who are the most vulnerable are protected. To a very great extent, though not invariably, those workers are already subsidised by state benefits because of their low wages. We should not continue to tolerate that. Firms, whether they be small, medium or large, are in business to make profits, which is perfectly sound. Those profits can be made in a number of different ways: increasing productivity or re-arranging business operations. Perhaps they can sell more goods or charge higher prices for them, but profits should not be as a result of paying sweated labour rates which subsequently become subsidised.
If it is said that by this amendment we give the Secretary of State power to make exemptions it sends out the wrong message. We have been arguing about
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this matter since the abolition of the wages councils. Not only would the amendment send out the wrong message but it would mean that Parliament did not determine the terms on which the national minimum wage should be paid. There is no need to provide the Secretary of State with an opportunity to change it. The national minimum wage has not been set so high that it will damage jobs. The unanimous recommendation of the Low Pay Commission composed of representatives of small businesses and workers has reached a conclusion and by and large, the Government have accepted it. To accept this amendment would send out the wrong message.
3.45 p.m.
The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): My Lords, before I turn to the new clause and the other amendments to which the noble Baroness has referred, perhaps I may comment briefly on the remarks just made by my noble friend Lord Davies of Coity and the noble Lord, Lord Razzall. The noble Lord has tabled his own amendment with which I shall deal in more detail later. I believe that my noble friend has put his finger on it. This is not a tremendously revolutionary Bill, or it should not be. It is a radical Bill which represents an important change.
The Bill is all about ensuring that those who are in employment and are most vulnerable are protected, and that is absolutely right. It is also about improving morale in the workplace and ensuring that people feel that they are not being exploited but have a role to play in an enterprise.
The noble Baroness, Lady Miller, in her Second Reading speech this afternoon reiterated her root and branch opposition to the concept of a national minimum wage, and she has not been chary of saying so. Her comments about election commitments were a little wide of the mark. When she referred to political dogmatism, perhaps she was referring to the dark days of the poll tax. The fact is that this was a very clear manifesto commitment on which we were elected. It does not mean that we have got everything right as a consequence. But this is such a fundamental part of our election platform that we are entitled to say that this is something that the electorate accepted. I understand perfectly well that the Opposition are unlikely ever to accept it. Despite that we are proceeding with the fundamentals of this Bill.
I remind the noble Baroness that the Labour Party has not resided at Transport House for many years. I recommend that she looks in the telephone directory to see where we are. Maybe the noble Baroness will come over to us. Lots of people are joining. She puts forward a rather ramshackle case. Our approach is diametrically opposed to the direction that she takes. We want an inclusive policy whereas she wants exception after exception to the point of neutering the Bill altogether. Therefore, we have here a whole series of wrecking amendments, which is essentially what Amendment No. 1 is all about. This amendment is not concerned with providing a limited range of exemptions or modifications. We want a single

591
national minimum wage which is universal in its application. There have been some minor exceptions to it, but the fact is that we are not in the business of excluding whole swathes of people which is what the noble Baroness seeks to do.
We want to get rid of poverty pay and have a level playing field so that companies can compete fairly on the basis of quality, not excessively low wages. I have made that position clear over and over again in the course of these debates and in the responses to the Statement that I made in this House not very long ago about the report of the Low Pay Commission.
The Bill has been designed in such a way that the possibility of exemptions according to sector, region, size of firm or occupation is excluded. It permits in specific circumstances exemptions or modifications according to age. The limitations we placed in Clauses 3 and 4, which this new clause would effectively remove, are in our judgment necessary limitations. What they do is to defend the integrity of the national minimum wage. That is something which the noble Baroness rejects entirely. We made clear in previous debates, when the noble Baroness moved somewhat similar clauses, that those amendments or new clauses fail, not only on conceptual grounds but on the grounds that they are wholly impractical.
I shall give an example of the exemptions that the noble Baroness has in mind. Why should it be possible to exempt a firm in Surrey rather than a firm in Cheshire? Why should a hairdresser at one end of the street be exempt rather than its competitor at the other end of the street, perhaps in a different county? Why should these low paid workers, likely to benefit from a minimum wage, be exempt? The noble Baroness has not come within a mile of answering those points which have been raised on previous occasions.
I move to Amendment No. 6, to which the noble Baroness also spoke. The amendment would remove all the limitations, which we have deliberately provided, on the powers of the Secretary of State to make key regulations on the way in which a worker's hourly rate of pay is to be calculated for minimum wage purposes. These amendments would not allow the Secretary of State to set more than one rate. Clause 1, rather than Clause 2, prescribes that the national minimum wage shall be a single hourly rate and thus establishes this fundamental principle. Clause 2 is concerned with how an hourly rate of pay is to be calculated; what will count towards the worker's pay for minimum wage purposes; what will be excluded; and how benefits in kind and one-off bonuses will be treated. Clause 2 gives the Secretary of State the power to determine matters within that category.
This is a complex matter. That is why we asked the Low Pay Commission to make recommendations on it. We have indicated that we are accepting those recommendations subject to consultation on the detail.
Subsection (7) of Clause 2 prevents the minimum wage calculation being applied differently in certain circumstances. That is what the noble Baroness
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seeks to amend, as attempted previously on several occasions in this place and elsewhere. The amendment proposes to do away with all the limitations in Clause 2 in one fell swoop so that we could have variations by region, sector, size of firm, age or occupation. It seeks to remove all such restrictions for the purpose of calculating if the rate has been paid. I think on further reflection that the noble Baroness might agree that we would end up with an absurd position, completely negating the purpose of the Bill, unless, as I indicated, that is the purpose of the actions being taken by the noble Baroness and her colleagues. I shall not go into the detail of the point made by the noble Lord, Lord Razzall, until later unless he wishes me to deal with it at this stage. He indicates to the negative.
I believe that what is proposed is not the right way to proceed. What is more, if we were to go down this route it would be a heavy vote of no confidence in our belief in the way in which the Bill will work out when enacted. I do not think that that is right. We have confidence in the Bill. We thought a lot about it before the election and since the election. We have had the help of the Low Pay Commission. It turned down the idea of regional variation. That was a sound conclusion.
I turn to Amendment No. 8, also touched on by the noble Baroness. Although we have not discussed the amendment previously, we have gone over similar ground at great length. This is an important area. I listened carefully, as I have done on previous occasions, to the noble Baroness. Clause 3 is drafted to permit us to take account, within certain limitations, of whatever the report from the Low Pay Commission recommended. I made clear when I repeated the statement in this House on publication of the report that we propose to use the Clause 3 power in a limited way by setting a modified rate for those aged from 18 to 21 and also to provide a modified rate for workers starting a new job with a new employer and where there is an accredited training scheme in operation and being applied.
Each of these outcomes reflects the importance that we attach to young people and trainees. The amendment seeks to alter the way in which the whole clause operates. It would provide the Secretary of State with a wide-ranging power to make exemptions whenever he or she felt it expedient so to do. It would remove all the limitations which currently prevent differentiation by region, sector, size of firm or occupation for persons below 26 provided for under Clause 3. It would undermine, in my submission, the whole purpose of the Bill as it relates to the category of workers below 26. I know that the noble Baroness is extremely persistent. I admire her for that, but I think she is wrong.
I turn to Amendment No. 10. The effect of this amendment is to remove all the limitations currently preventing differentiation by region, sector, size of firm or occupation for persons aged 26 and over who might potentially be added by regulations under Clause 4 to the candidates for exemption under Clause 3. The amendment constitutes, once again, a

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direct attack on the principles of the Bill. We have all along made clear our commitment to the principles which I have adumbrated today. While I understand that it is difficult for the noble Baroness and her colleagues to accept those principles, they are essential as far as this Bill is concerned. For those reasons I would ask the noble Baroness to withdraw the amendment.
There is one other matter to which I should refer. It concerns small firms. I shall quote, for the benefit of the noble Baroness, two passages from the report of the Low Pay Commission. The noble Baroness expressed the view that small businesses were opposed to the national minimum wage. I refer to the comment at page 106, paragraph 6.41:
"We made great efforts to canvass their [the small firms] opinion and held many meetings with employers in small firms and their representatives. There were differences between such firms, but we recognise that many do not have the same margins or management resources as larger competitors. We were sensitive to this in making our recommendations".
The report continues at page 135, paragraph 7.11:
"Written evidence from trade associations representing small stores indicates that although there will be some substantial increases in wage bills for some companies, the majority of stores will be able to cope with our recommendations".
The issues were firmly and comprehensively dealt with by the Low Pay Commission. I think that those are relevant quotations.
Viscount Thurso: My Lords, before the Minister sits down perhaps I could ask one specific question which follows on from the points made by my noble friend Lord Razzall. It is in relation to areas. He chose the example of shops at each end of a street in Surrey. However, if my memory is correct, and perhaps he can confirm this, the Scotland Bill makes the national minimum wage a reserved matter. Consequently, in future, on a larger scale, as between England and Scotland, if Scotland wish to have a different rate or a different application of the Bill—and if I were lucky enough to be elected to the Scottish parliament it might be a higher rate than the one proposed but it might equally be a lower rate—would Scotland have to return, under those circumstances, to England, to primary legislation, to achieve its objective? In that circumstance, would it not be possible for some exception to be available to the Secretary of State so that she might at least be able to act by order for Scotland?
Lord Clinton-Davis: My Lords, I believe that primary legislation would be required. But this would not be the only situation of that kind. We are dealing with the Low Pay Commission report; and with the text of this Bill as drafted at present. The philosophy underlying that is as I have indicated.
I do not believe that there is reason to deal with the matter on the regional basis that the noble Lord implies he supports. However, we shall come to that on a later amendment.
4 p.m.
Baroness Miller of Hendon: My Lords, I was disappointed with the Minister's remarks on two counts. First, it is a pity that between Committee and Report stages the compliments I received from the other side of the Chamber about the eloquent way in which I presented the amendments have now become references to a ramshackle Second Reading speech. I found that disappointing.
Lord Clinton-Davis: My Lords, it was the case presented, not the speech.
Baroness Miller of Hendon: My Lords, clearly it was not effective, as the noble Lord described my speeches in Committee. However, that is a mild comment which caused me disappointment.
My second disappointment is that the Minister's mind is closed to what I have been saying. It is true—I accept it—that we do not like the national minimum wage but we accept that we shall have it. My amendment attempted to save the Government from trouble in the years to come if parts of the legislation for the national minimum wage do not work properly. The Minister's first few words indicated that the Government had not got everything right. I know that politicians do not like to have their words quoted to them but that was said only a moment or two ago.
The fact is that other countries have a minimum wage, and they have exceptions. I do not suggest, as the noble Baroness, Lady Turner, may have thought, that we require all the exemptions provided in the amendment. The President of the Board of Trade may find that she needs certain exemptions. If so, she should be able to deal with the matter by statutory instrument and not have to come back to the House for primary legislation when there clearly would not be time for it. She does not have to exercise that power; it does not wreck the Bill. The Minster referred to a wrecking amendment. It is not a wrecking provision. It need never be used.
The President of the Board of Trade may agree with the statement from the Sunday Times that the provision might be more harmful in certain parts of the country. The Minister referred to a hairdresser in Surrey and somewhere else that I cannot recall. There are certain deprived areas in the country. She may well need the power. I believe that that was the intention of the amendments brought forward by noble Lords on the Liberal Democrat Benches. They agree with the national minimum wage but understand that there may be a need for exemptions.
The Minister states that they may not have got everything right. While countries such as the United States of America and in Europe have exemptions, I cannot understand why the Government nevertheless believe that this country does not need them. I believe that that is totally inappropriate. I was trying to save the Government, not the employers, from making a horrendous mistake. I am not satisfied with the reply and feel it only right to test the opinion of the House.
4.5 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 161; Not-Contents, 103.

Division No. 1

CONTENTS

Abercorn, D.

Halsbury, E.

Aberdare, L.

Hamwee, B.

Addington, L.

Harding of Petherton, L.

Ailsa, M.

Harmsworth, L.

Aldington, L.

Harris of Greenwich, L.

Anelay of St. Johns, B.

Hayhoe, L.

Ashbourne, L.

Higgins, L.

Astor of Hever, L.

Holderness, L.

Attlee, E.

HolmPatrick, L.

Baker of Dorking, L.

Home, E.

Balfour, E.

Hothfield, L.

Beaumont of Whitley, L.

Hunt of Wirral, L.

Belhaven and Stenton, L.

Hylton-Foster, B.

Beloff, L.

Ilchester, E.

Belstead, L.

Jenkin of Roding, L.

Biddulph, L.

Kimball, L.

Biffen, L.

Kingsland, L.

Birdwood, L.

Kinnoull, E.

Blatch, B.

Lauderdale, E.

Brabazon of Tara, L.

Lloyd-George of Dwyfor, E.

Braine of Wheatley, L.

Long, V.

Brentford, V.

Lucas of Chilworth, L.

Bridgeman, V.

Ludford, B.

Brougham and Vaux, L.

Luke, L.

Bruntisfield, L.

Lyell, L.

Burnham, L. [Teller.]

McColl of Dulwich, L.

Cadman, L.

MacFarlane of Bearsden, L.

Calverley, L.

Macleod of Borve, B.

Campbell of Alloway, L.

McNair, L.

Campbell of Croy, L.

McNally, L.

Carew, L.

Masham of Ilton, B.

Carlisle, E.

Mayhew of Twysden, L.

Carnegy of Lour, B.

Mersey, V.

Charteris of Amisfield, L.

Miller of Hendon, B.

Chelmsford, V.

Monson, L.

Clanwilliam, E.

Monteagle of Brandon, L.

Clark of Kempston, L.

Mowbray and Stourton, L.

Clement-Jones, L

Moyne, L.

Cockfield, L.

Munster, E.

Courtown, E.

Naseby, L.

Cowdrey of Tonbridge, L.

Newall, L.

Craig of Radley, L.

Newby, L.

Cranborne, V.

Newton of Braintree, L.

Cullen of Ashbourne, L.

Nicholson of Winterbourne, B.

Davidson, V.

Norfolk, D.

Dean of Harptree, L.

Northesk, E.

Denton of Wakefield, B.

Oppenheim-Barnes, B.

Dholakia, L.

Orr-Ewing, L.

Dilhorne, V.

Palmer, L.

Dixon-Smith, L.

Pender, L.

Elibank, L.

Perry of Southwark, B.

Elles, B.

Peyton of Yeovil, L.

Elton, L.

Pilkington of Oxenford, L.

Exmouth, V.

Porter of Luddenham, L.

Ezra, L.

Rankeillour, L.

Ferrers, E.

Rawlings, B.

Fookes, B.

Razzall, L.

Fraser of Carmyllie, L.

Redesdale, L.

Gainford, L.

Renwick, L.

Gardner of Parkes, B.

Richardson, L.

Glentoran, L.

Roberts of Conwy, L.

Gormanston, V.

Rodgers of Quarry Bank, L.

Gray of Contin, L.

Saltoun of Abernethy, Ly.

Grey, E.

Sandberg, L.

596

Savile, L.

Thomson of Monifieth, L.

Seccombe, B.

Thurso, V.

Selkirk of Douglas, L.

Tope, L.

Sharples, B.

Tordoff, L.

Skelmersdale, L.

Trefgarne, L.

Soulsby of Swaffham Prior, L.

Trumpington, B.

Steel of Aikwood, L.

Vivian, L.

Strange, B.

Waddington, L.

Strathcarron, L.

Wallace of Saltaire, L.

Strathclyde, L.[Teller.]

Westbury, L.

Whitelaw, V.

Sudeley, L.

Wigoder, L.

Swinfen, L.

Wilcox, B.

Tebbit, L.

Winchilsea and Nottingham, E.

Teviot, L.

Wise, L.

Thomas of Gresford, L.

Wynford, L.

Thomas of Walliswood, B.

Young, B.

NOT-CONTENTS

Allenby of Megiddo, V.

Irvine of Lairg, L. [Lord Chancellor.]

Archer of Sandwell, L.

Barnett, L.

Jakobovits, L.

Bassam of Brighton, L.

Janner of Braunstone, L.

Berkeley, L.

Jay of Paddington, B.

Blackstone, B.

Jeger, B.

Blease, L.

Jenkins of Putney, L.

Borrie, L.

Kennet, L.

Brooks of Tremorfa, L.

Kilbracken, L.

Bruce of Donington, L.

Lockwood, B.

Burlison, L.

Longford, E.

Lovell-Davis, L.

Carmichael of Kelvingrove, L.

McCarthy, L.

Carter, L. [Teller.]

McIntosh of Haringey, L. [Teller.]

Castle of Blackburn, B.

Cledwyn of Penrhos, L.

Mackenzie of Framwellgate, L.

Clinton-Davis, L.

Mason of Barnsley, L.

Cocks of Hartcliffe, L.

Merlyn-Rees, L.

Currie of Marylebone, L.

Milner of Leeds, L.

David, B.

Molloy, L.

Davies of Coity, L.

Monkswell, L.

Dean of Beswick, L.

Morris of Manchester, L.

Dean of Thornton-le-Fylde, B.

Murray of Epping Forest, L.

Desai, L.

Nathan, L.

Dixon, L.

Orme, L.

Donoughue, L.

Peston, L.

Dormand of Easington, L.

Plant of Highfield, L.

Dubs, L.

Ponsonby of Shulbrede, L.

Evans of Parkside, L.

Ramsay of Cartvale, B.

Ewing of Kirkford, L.

Randall of St. Budeaux, L.

Rea, L.

Falconer of Thoroton, L.

Rendell of Babergh, B.

Farrington of Ribbleton, B.

Richard, L. [Lord Privy Seal.]

Gallacher, L.

Rogers of Riverside, L.

Gilbert, L.

Scotland of Asthal, B.

Gilmour of Craigmillar, L.

Sefton of Garston, L.

Gladwin of Clee, L.

Serota, B.

Gould of Potternewton, B.

Sewel, L.

Graham of Edmonton, L.

Shepherd, L.

Gregson, L.

Shore of Stepney, L.

Grenfell, L.

Simon, V.

Hacking, L.

Smith of Gilmorehill, B.

Hardie, L.

Stallard, L.

Hardy of Wath, L.

Stoddart of Swindon, L.

Haskel, L.

Stone of Blackheath, L.

Hayman, B.

Strabolgi, L.

Symons of Vernham Dean, B.

Henderson of Brompton, L.

Taylor of Blackburn, L

Hilton of Eggardon, B.

Thomas of Macclesfield, L.

Hogg of Cumbernauld, L.

Turner of Camden, B.

Hollis of Heigham, B.

Whitty, L.

Hoyle, L.

Williams of Elvel, L.

Hughes of Woodside, L.

Williams of Mostyn, L.

Hunt of Kings Heath, L.

Young of Old Scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.
4.15 p.m.
Clause 2 [Determination of hourly rate of remuneration]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 2:
Page 2, line 11, leave out ("and times at which,") and insert ("times at which, or the time for which,").
The noble Lord said: My Lords, I shall speak also to Amendments Nos. 3 and 5. The amendments address a specific troublesome technicality which has only just become apparent. I have written to the noble Baroness, Lady Miller, and the noble Lord, Lord Razzall, on this matter.
The general effect of the three amendments is to extend slightly the flexibility of the power to calculate the rate. We want to be confident that the clause provides us with the power we need to deliver through the regulations what the Low Pay Commission has recommended regarding the treatment of homeworkers who are paid by the piece.
Let me remind the House how Clause 2 operates. Clause 2 deals with the determination of the hourly rate of remuneration. This clause was drafted flexibly to enable us to reflect, as far as could be envisaged, whatever the Low Pay Commission might recommend in its report regarding the calculation of the hourly rate for national minimum wage purposes.
It is essentially a technical clause but one which is important to the flexible operation of the Bill. It provides for a wide range of possible permutations in determining what elements of pay can be included or excluded; for example, overtime, bonuses, benefits, holiday pay and so forth. It enables a wide range of working situations to be taken into account, including piece-work, payment of standard wages at a regular rate, and payments on commission or at different rates over different periods of time.
Since receiving the report, we have been considering the practicalities of putting into effect the Low Pay Commission's recommendations. In particular we have been looking at those workers who work away from the office and are paid by output rather than time worked. For this particular case, it has become apparent that the clause may not be flexible enough. In particular, the LPC recommendations suggest that piece-workers should be entitled to the hourly minimum wage of every hour worked regardless of the piece rate, and that employers of homeworkers should be able to demonstrate that piece rates have been evaluated to confirm compliance.
The fairest and least bureaucratic way to do that is to ensure that there can be agreement between worker and employer over the maximum hours to be worked and the output expected. We need to ensure we have the powers to do that under Clause 2. We are therefore proposing three amendments to the clause, the third of which is purely consequential.
Amendment No. 2 addresses subsection (3), which relates to how working time is to be treated for minimum wage purposes. The amendment ensures that the regulations can prescribe those times for which a
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worker may be treated as working. The amendment is a technical rewording to ensure that we have the powers to prescribe in regulations that, where piece-workers work at home with no agreed hours, the worker and employer may together agree the maximum hours which are to be worked and to be claimed.
Amendment No. 3 addresses the same subsection and makes explicit the power to prescribe that an agreement may be reached regarding the maximum or minimum time that a person shall be treated as working. As with Amendment No. 2, this change is necessary in the particular case of the piece-worker working at home with no present limit on the hours to be worked.
In the interests of legal certainty, it ensures that we have sufficient flexibility to implement the Low Pay Commission's recommendations regarding piece-workers and homeworkers through the regulations. I beg to move.
On Question, amendment agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 3:
Page 2, line 15, at end insert—
("(3A) The provision that may be made by virtue of paragraph (a) of subsection (3) above includes provision for or in connection with

(a) treating a person as, or as not, working for a maximum or minimum time, or for a proportion of the time, in any period;

(b) determining any matter to which that paragraph relates by reference to the terms of an agreement.").

On Question, amendment agreed to.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 4:
Page 2, line 19, at end insert ("and such valuation in relation to food or accommodation shall stipulate a maximum amount determined by the Secretary of State that may be added to wages paid in cash, taking into account any information that is reasonably available to him of the average cost of food and the average value of staff accommodation (including Council Tax and the cost of utilities) in different areas of the United Kingdom").
The noble Baroness said: My Lords, I regret having to move this amendment at this stage of the Bill, but it arises from a recommendation contained in the report of the Low Pay Commission. As your Lordships are aware, although the report was in the hands of some trade union leaders several days before its official publication, it was not available to Parliament until two of the three sessions of the Committee stage had taken place. At the Committee stage, the matter of yet another leak of the document was raised and subsequently inquiries were made by my noble and learned friend Lord Fraser of Carmyllie. I regret to say that he has received a far from satisfactory reply from the Minister.
However, having had the opportunity to read the report, I am concerned by the recommendation of the Low Pay Commission as regards benefits in kind. The recommendation is contained in paragraphs 4.27 and 4.30, commencing on page 59. It provides that with the exception of accommodation, benefits in kind shall be

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excluded from the calculation of the national minimum wage. The Low Pay Commission concedes that:
"Benefits include a wide range of cash and non-cash items, including paid holidays, occupational sick pay, paid maternity leave, pensions, life assurance, company cars, private health insurance, shares and share option schemes, and subsidised restaurants, free meals and luncheon vouchers".
That is a formidable list and a costly one to employers. The Low Pay Commission contends that:
"Few low-paid workers receive much in the way of benefits",
apart from retail discounts. I certainly believe that to be true. But we are concerned about those low-paid employees who receive benefits in kind from their employers as part of their remuneration package. Although it may cost the employer a considerable sum to provide those valuable benefits, the Low Pay Commission proposes that all but one of them—the cost of accommodation—should be ignored. It also goes on to put an arbitrary and totally inadequate figure on the maximum to be allowed as the cost of that accommodation.
I shall return to that point, but, first, I wish to tell your Lordships about the industry which, as I mentioned when I spoke to Amendment No. 1, is in danger of total destruction if the provisions of the Bill are not modified, in particular the provisions concerning benefits in kind. This industry employs more people than there are share fishermen, whom the Government have made a special case under Clause 43. Yet I am not pleading for a special exemption for this industry alone. There are other types of businesses in similar circumstances which are affected in the same way by the provisions concerning the valuation of board and lodging provided by the employer. The commission recommends that nothing should be allowed for the value of board and a derisory £20 a week for the lodging. Even that is to be phased out in the longer term.
In order to explain the problem in relation to various industries, perhaps I may first tell your Lordships about the activity holiday trade. It runs what are commonly called "summer schools". In the United States of America they are called "countrywide summer schools". In this country, there are 30 activity holiday centres affiliated to one trade federation. There may be other similar unaffiliated concerns in the country, but, between them, those 30 businesses employ some 3,000 staff at any one time. They provide activity holidays for some 200,000 children a year, most of them sent on package visits by their schools. The children have to pay their own fees, or the schools raise the money by appeals, jumble sales and similar means for those children whose parents cannot pay for them to go.
This means that the charges must be kept to the barest minimum, otherwise the schools could not afford to participate. The charges are limited, despite the fact that apart from the facilities which the activity centres have to provide they also supply board and lodging for the pupils and any of their own teachers who accompany school groups. The activity centres must also, rightly, comply with the stringent safety requirements imposed by the Activity Centres (Young Persons' Safety) Act 1996.
The staff of these centres are involved in work experience towards National Vocational Qualifications in catering, leisure activities, sports training and customer care. They receive pocket money and full board and lodging as well as their work experience, to say nothing of having, in effect, a working holiday. And your Lordships should bear in mind that there are far more applicants for staff places than there are vacancies. With the training they receive and the benefits they enjoy, I am not at all surprised.
If the value of their board and other fringe benefits is totally disregarded, as the Low Pay Commission recommends, and the value of the living accommodation is limited to £20 a week, none of these businesses will be able to stay in business. I stress that I am not pleading a special case either for this industry or one firm within it, but merely trying to illustrate the problem. As an example, I should like to show your Lordships what the effect of the Low Pay Commission's proposals would have on an activity centre in Bude, Cornwall.
Apart from pocket money of between £50 and £75 a week, and the value of training for nationally recognised qualifications, the staff also receive a package including full board, uniforms, laundry, equipment and other benefits worth at least another £44 a week. To supplement the cash paid to the employees because of the items that the Low Pay Commission recommends should now be disregarded will cost the centre an extra £120,000 a year. But its profits, which it would normally expect to plough back into the facilities, amount to only £80,000. Despite the fact that this centre operates only seasonally from April to October, it contributes £1¼ million a year to the struggling and hard-pressed local economy.
In the United States, the originator of the summer camp, the exception where applicable is given to small businesses with a turnover of less than 500,000 dollars a year. That is one exemption, refused by the Government, which at a stroke would solve many of the problems created by the Bill. But another exemption in the United States applies to the seasonal camps, which are also exempted from the national minimum wage; another example of how the national minimum wage is adapted to the needs of particular trades. That is the flexibility to which the Government pay lip service, but refuse to concede.
I refer again to the recommended ceiling for accommodation. It is £20 a week—what a ridiculous figure! If the employee uses it only for five days or nights a week it works out at £4 a night. If he is there for seven nights a week—for example, a resident caretaker—it is under £3. Where can anyone find accommodation at that price? A night's stay in the city of Bath YMCA costs £11 a night in a dormitory and at least £14 in a single room, breakfast included. The YMCA could hardly be called a profiteering organisation. The Youth Hostels Association, depending where its facility is situated, charges about £9.75. My recollection of the YHA is that the facilities were pretty spartan.
I am not suggesting that the value of the accommodation should be equated to the cost of staying at the Ritz. But the information which I have given to

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your Lordships was obtained in fewer than 10 minutes as a result of two simple telephone calls. I have to wonder what kind of research the Low Pay Commission conducted before coming to its extraordinary recommendations about the items of benefits in kind to be excluded from the calculation of the national minimum wage.
The Low Pay Commission conducted a painstaking inquiry before it wrote its report. I do not agree with many of its conclusions or recommendations, but I cannot fault its methodology on most aspects. However, in respect of benefits in kind, particularly over the value of accommodation, its work has been perfunctory and slapdash. Hence, I believe that its recommendations are neither credible nor acceptable. I quote from its report:
"It is difficult to estimate and monitor the value of many benefits … On grounds of simplicity and enforceability, therefore, we recommend that, with the exception of accommodation, benefits should be excluded from the calculation of the National Minimum Wage".
There are two reasons why the Low Pay Commission is wrong to suggest that the value of the benefits is difficult to calculate or to monitor. The first is that the Inland Revenue has considerable expertise, built up over generations of defeating tax evaders and closing up tax loopholes, in valuing benefits in kind and enforcing the payment of tax on them.
In its report, the Low Pay Commission actually recommends that enforcement of the national minimum wage should be left in the hands of "an existing Government agency". The commission particularly and enthusiastically recommended the Contributions Agency, which is to combine with the Inland Revenue just as this Act will come into force because, and again I quote:
"It analyses payroll data, and for benefit fraud reasons checks for apparently abnormally low wages. It has compliance investigation teams, allied to fraud teams".
I submit that the Contributions Agency, combined with the Inland Revenue, will have absolutely no problem in valuing the benefits in kind and preventing fraud by employers. In addition, the Low Pay Commission has recommended that,
"employers should be required to display on pay slips both the national Minimum Wage and details to enable workers to claim readily whether they have received the statutory minimum".
The model pay slip that is shown as an example in the 12th schedule to the report could just as easily require the employer to state the value of the benefits that he or she is claiming should be taken into account. The onus of proving their value in case of dispute will of course be on the employer. It should be noted that the Secretary of State has taken powers under Clause 12 to prescribe by regulations the contents of an employee's wages statement.
The second reason that the Low Pay Commission is wrong to say that the value of benefits is too difficult to calculate is that it was the commission's responsibility and duty to recommend a framework to do so. I have never heard of a commission of inquiry such as this abdicating its responsibilities and saying, in effect, "It is much too hard. We just can't do it. Instead, we will
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allow employers who may be providing benefits that are costing them hundreds of pounds a year to bear the expense without being given a single pennyworth of credit for it". I believe that that is a monstrous and totally unacceptable concept.
What I expect to hear from the Government in reply to my amendment is that, when the Secretary of State makes the regulations under Clause 2, particularly under subsection (4), she will not arbitrarily ignore and disregard benefits which have a real value to the employee and a real cost to the employer—that is to say, a value in cost which can both be measured and verified by the tax or other enforcement authorities, and which the employer will have to declare in writing under other regulations which the Secretary of State is going to make—a value and cost which it will be up to the employer to prove if challenged.
This amendment is not about the problems of the activities centres' industry; indeed, it is just an example of the problems that will afflict every employer who provides benefits in kind as part of the remuneration of his workers. Simple justice demands that they should get credit for them and that they should not be ignored just because the commission and the Government find it difficult to check them. I beg to move.
4.30 p.m.
Lord Haskel: My Lords, this amendment raises the issue of what benefits should count towards pay for the purpose of the national minimum wage; and how they should be valued. The noble Baroness prayed in aid a quotation from the report of the Low Pay Commission, which states:
"with the exception of accommodation, benefits should be excluded from the calculation of the National Minimum Wage".
However, what the noble Baroness did not mention was that the commission then went on to say:
"An offset should be allowed where accommodation is provided as a benefit-in-kind. In order to protect workers from unreasonable charges, however, a maximum figure of £20 per week should be set for any deduction for the cost of the accommodation. The operation of this offset should be monitored and consideration given to phasing it out in the longer term".
So the Low Pay Commission did take the matter most seriously and, indeed, gave it serious consideration. The Government have said that they accept these recommendations in principle, subject to consultation on the detailed regulations. Those regulations are of course important. The point is that the primary legislation—that is, the Bill—already provides the flexibility to allow particular benefits in kind either to be included or excluded. It is the secondary legislation which will determine the details. As I indicated, we envisage that this will be done in line with the recommendations of the Low Pay Commission.
In my view, if the amendment of the noble Baroness were accepted, it would mean a degree of considerable complication. It would require the Secretary of State to set a maximum amount for the value of food or accommodation; and, in setting that maximum, to take account of the different cost of food, accommodation and other living costs in different areas of the United

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Kingdom. So we are back to the argument that arose when we discussed the first group of amendments; namely, that the cost will vary in different parts of the country.
The amendment therefore goes beyond the Low Pay Commission's recommendation which excludes all benefits from the calculation of pay for national minimum wage purposes, except accommodation, on which, as the noble Baroness said, it puts a maximum of £20 a week. If the amendment is intended to provide an offset for food, I do not see why we need to depart from the commission's recommendation in the way suggested. As I have said, the Bill enables the regulations to provide for offsets for any kind of benefit in kind and, if it is right, to impose a maximum on the amount that may be offset in respect of the benefit in question. Therefore, by regulation, the Minister has the flexibility to deal with it. Thus I believe the amendment to be unnecessarily prescriptive.
The whole point of the amendment is that it would overcome the feeling that the Low Pay Commission has that we should discourage payments in kind. The whole purpose of the National Minimum Wage Bill is to set a fair and reasonable minimum wage; indeed, it is not to set a wages policy.
The noble Baroness raised a question about activity centres. I cannot deal with individual cases, but I would refer the noble Baroness to Clause 44 which deals with the question of volunteers. There may or may not be a contract of employment between people who work in such activity centres and those who run them. That may be a matter for an employment tribunal, but it is not one for the Inland Revenue. I cannot deal with that particular case. Nevertheless, if the noble Baroness were to look at Clause 44, I believe that she would find some part of an answer.
The noble Baroness was rather critical of the Low Pay Commission and said that it was really not very diligent and had not carried out its work properly. Perhaps I may remind her that the commission visited 61 cities, towns and villages around the country. Members of the commission spoke to many people; they consulted existing studies and carried out their own research. In the view of the Government, the work of the commission was very well carried out and I do not accept the noble Baroness's criticism of its work. I believe that what we have put in the Bill is a sensible approach at the start of the minimum pay legislation. There is some flexibility there to review it if necessary, so I hope that the noble Baroness will feel able to withdraw her amendment.
Lord Monson: My Lords, before the Minister sits down, can he tell us whether he knows of anywhere in London or in the south-east of England where a single person could rent a room for as little as £40 a week, let alone £20?
Lord Haskel: My Lords, this is not about the price of accommodation; it is about what a minimum wage should be. If one was discussing the benefit in kind in a wages policy as to what the maxima should be, then of course
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that would enter into the argument. However, it does not enter into the argument when we are deciding what a fair and decent minimum wage should be.
Baroness Miller of Hendon: My Lords, I have to confess that I did not exactly understand everything that the Minister said in his response. He quoted certain parts of the report by the Low Pay Commission, but they were exactly the same quotes as I used in my opening remarks to promote my amendment. It seems to me that the noble Lord read out exactly the same quotes in order to counteract my argument. I find that quite extraordinary.
As far as concerns the Low Pay Commission, I actually complimented it on the methodology that it used in every other part of the report and on the very careful work that it accomplished. In no way did I suggest that the commission was not careful and meticulous in its work, except in this particular instance. I read out the part of the report which says:
"It is difficult to estimate and monitor the value of many benefits … On grounds of simplicity and enforceability we therefore recommend that, with the exception of accommodation, benefits should be excluded".
The grounds the commission gave was that it was difficult to work out and enforce. The point I was making is that it was asked to look into the matter and in my view it ought to have come up with a formula. However, I shall read again what the Minister has said because, as I said, I found it extraordinarily difficult to understand. At a quick glance I cannot see that Clause 44 has any benefits at all in this regard but I shall examine it again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 5:
Page 2, line 32, after ("(2)") insert (", (3) and 3A)").
On Question, amendment agreed to.

Business
Lord Carter: My Lords, before we discuss the Statements on the Transport White Paper and the International Criminal Court, I take this opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

The New Deal for Transport
4.40 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Deputy Prime Minister. The Statement is as follows:
"With permission, Madam Speaker, I wish to make a Statement on transport policy. A White Paper, New Deal for Transport: Better for Everyone is published today and has been placed in the Libraries of both Houses.
"This White Paper delivers on our manifesto commitment to develop an integrated transport policy to assist mobility and economic growth, to fight congestion and pollution and to help create a fairer society. It will widen choice, providing people with a real alternative of a decent, modern and reliable public transport system.
"The public mood has changed. The previous government's Green Paper, the Royal Commission on Environmental Pollution, the Select Committee and our own consultation exercise demonstrated that there is now a consensus for radical change. Everyone now agrees that no change is not an option.
"Privatisation and deregulation in the 1980s and 1990s produced a public transport system which was fragmented, lacked investment and attracted fewer passengers. It led to more congestion and did more damage to the environment and public health.
"Last year, two records were broken: a record 1 million rail passengers complained and a record number of rail millionaires were created. What an indictment of privatisation. Bus passengers have fallen by 25 per cent. since deregulation. Car drivers sit in traffic for hours. The CBI complains of the £15 billion cost of congestion. Walking and cycling are often unpleasant and dangerous. Many women fear for their own safety on public transport and for the safety of their children going to school.
"If we do nothing, traffic will grow by 30 per cent. in the next 20 years with more traffic jams, longer rush hours and a 10 per cent. increase in CO2 emissions at a time when the Kyoto accords require us to cut emissions.
"The core of our approach is integration, to allow people to switch from bus to train, from their cars to park and ride. But it is also about integrating transport with environment policy and land-use planning and with our economic, health and education policies and the creation of a fairer society.
"People need better information to achieve a seamless journey. Today I can announce a revolution in information to the passenger. We will introduce a comprehensive integrated national public transport information system by the year 2000. A passenger will be able to access information on all forms of transport to a single point by phone, teletext or Internet.
"Through better planning policies we can reduce the need to travel as we are showing with our Millennium Village in Greenwich. Homes should be close to shops, schools, health and other services so that people can walk rather than drive. We will revise planning guidance to take account of our new integrated transport policy. We have given more emphasis than any previous government to making it easier to walk and cycle. I endorse the target to double cycling within six years.
"Rural areas have their own specific needs; 75 per cent. of rural parishes now have no daily bus service. We have already committed £150 million to
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improve rural public transport, doubling the support in many rural areas. Proposals are in the final stages of preparation.
"Better public transport, particularly rail and bus, are the cornerstone of our approach. A better, modern, reliable bus presents the best opportunity for leading a renaissance of public transport. Quality partnerships, which already exist in a handful of local authorities, have proved popular with the public and passenger numbers have increased by up to 40 per cent. and people are using their cars less. I want to see more of them.
"The bus must have priority on the road. This will lead to faster, more reliable services which attract more passengers. Stiffer penalties and tougher enforcement will deter bus lane road hogs. We can transform the economics of the bus industry by adding just two extra passengers per bus journey, improving revenues by some £400 million. More revenue will lead to more investment, better buses, more frequent services and proper training and conditions for bus drivers. The one I met this morning could benefit from a visit to charm school—probably the same one I attended.
"Bus operators must help spruce up bus stations, provide better information at bus stops and co-operate on ticketing with other bus and rail operators. In addition the Government are prepared to give statutory force to exclusive quality contracts on particular routes. The days of the cowboy bus operators are over. For too long the bus has been seen as the workhorse. I want it to be a racehorse. Today I issue a challenge to bus companies and manufacturers to create a new bus fit for the 21st century in design, operation and comfort; buses which are more accessible to elderly and disabled people and to mothers with children and heavy shopping.
"Transport policy needs to pay special attention to the 13 million people in homes without a car. Pensioners in particular rely on good quality services at affordable prices. I am therefore pleased to announce for the first time a national minimum concessionary fares scheme guaranteeing at least a half fare for every pensioner in Britain. This will benefit 3 million pensioners currently denied the benefits of such a scheme.
"Our proposals for railways are in line with the unanimous recommendations of the Select Committee, the response to which I am issuing today as Cmnd 4024. There will be tougher regulation of train companies. Spearheaded by our new strategic rail authority, enforcement will be speeded up and strengthened with tougher penalties. If these companies continue to fail the passenger, they will lose their right to operate. In the short term, OPRAF will remain the operator of last resort. British Rail will retain the ability to be a train operator. The functions of both will become part of the strategic rail authority.
"The rail industry needs a stable framework to deliver long-term investment and better services for passengers. Seventeen of the existing franchises come

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up for renewal within the next six years. Some train operators want early renegotiation of their franchises. I stand ready to consider their requests. But I make one thing clear. If any application is to succeed, it will have to guarantee better performance, more investment, improvements for the rail passenger and value for the taxpayer.
"An independent rail regulator will remain but there will be clear demarcation from the new responsibilities for the strategic rail authority. Railtrack will be tightly scrutinised to ensure it invests sufficiently in the rail infrastructure. The rail regulator has been critical of Railtrack's investment record as recently as last week. I intend to see that these criticisms are addressed. I have asked the rail regulator to carry out a review of both the level and the structure of the charges, including the mechanisms for payment. We will set up new rail funds with £100 million to lever in additional leading edge investments in the rail network.
"The House is aware that the National Audit Office condemned the scandalous sale by the previous government of the rolling stock leasing companies, known as Roscos. I asked the rail regulator to investigate the failure of the Roscos which he has completed. I have asked him to negotiate a new concordat with Roscos on the leasing and re-leasing terms of rolling stock. If that is not effective, I will consider bringing Roscos into formal regulation.
"Rail freight is a better environmental option and we endorse the rail freight industry's target to double traffic carried by rail within five years and treble it in 10. We have already doubled rail freight grants. We will increase them by a further one-third this year and extend them to coastal shipping. It is my intention to use the proceeds from the part sale of NATS to reinvest in transport improvements, such as a Euro-gauge freight rail system from the Channel Tunnel right through to Scotland if terms can be agreed.
"This Government will invest in rail freight but we recognise that over 90 per cent. of goods will continue to be moved by road. From January 1st next year, European law requires us to raise the maximum gross weight of lorries from 38 to 40 tonnes.
"I am concerned about the cost of road and bridge maintenance with an increase in five axle heavy lorries and I therefore want to send the strongest possible signal to encourage six axle lorries. I have therefore decided to allow 41 tonne lorries on six axles from January 1999. I am not convinced of the case for going to 44 tonne lorries but I will ask the new commission for integrated transport, which I will describe later, to review the evidence and make recommendations.
"Everyone now acknowledges that we cannot build our way out of congestion. The days of 'predict and provide' are over. We will give top priority to maintaining and managing the existing roads. I propose to transform the Highways Agency into a network operator rather than simply a road builder.
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I am pleased to announce the signing today of an historic agreement between the Highways Agency and Railtrack to work together on developing integrated solutions.
"We will allow the Highways Agency to operate a number of pilot charging schemes and use the income stream to re-invest in the road network. For example, I am looking at how to redirect toll revenue from the Dartford crossing to improve traffic management on the M.25.
"Like millions of my fellow drivers, I know that sitting in traffic jams at all times of the day robs driving of its convenience. It is not pro-car to allow congestion to escalate. It is not pro-car to allow smog and pollution to increase. The car driver is breathing in air around three times more polluted than the air outside. The most anti-car policy is to do nothing. Pro-public transport does not mean being anti-car.
"I am pleased to announce today a new deal for the motorist. The Highways Agency will have specific responsibility to reduce delays. We will establish regional traffic control centres to help traffic flows and improve information to motorists about road works and delays. We will also act against cowboy wheelclampers. And we will use the DVLA's databank to provide better information and protection for drivers when buying used cars.
"As school holidays begin, everyone notices the differences in traffic. Parents driving their children often short distances to schools has increased congestion significantly at peak times. Some schools have already shown that safe and secure routes, with adult supervision, can reduce unnecessary car use. Parents welcome this as an extension of choice and a safer alternative.
"No transport issue is more important than safety. We intend to issue new road safety strategy and targets later this year. And in response to the Select Committee, we propose to carry out a thorough review of the institutional arrangements for transport safety.
"The key to the success of our new approach to transport is partnership. Let no one say we are not putting our money where our mouth is; £1.7 billion increase in public investment for transport over the next three years; £7 billion public-private partnerships for the Underground; £6 billion partnership for the Channel Tunnel Rail Link.
"Together with new revenue streams for local authorities, commercial freedom for local authority airports and private investment in buses and trains, this represents the biggest ever investment in public transport, and, as the Chancellor said, doubling the total transport investment over the next seven years.
"Partnership will also be important at local level. Local councils will consult with all the main interested parties to draw up local transport plans. These plans will set targets and actions to develop public transport, improve air quality, enhance road safety and reduce road traffic.
"This is a major new initiative and will be backed by £700 million which will enable 150 local transport strategies over the next three years. There will be new powers for local authorities to levy charges for the use of congested roads, and on workplace parking. The revenue from this will be used to improve local public transport and traffic management.
"These will be local schemes decided by local people, defined by local needs. The proceeds will be reinvested in local transport through a ring-fenced fund. All such plans will be subject to the approval of the Secretary of State. This White Paper establishes the principle. I intend to issue a consultation paper in due course on its implementation.
"I am grateful to my right honourable friend the Chancellor for allowing the courage to establish such a radical reform of public finances, allowing hypothecation of this income. This Government are ending decades of under-investment, modernising our transport system and investing for the future.
"Transport must be publicly accountable. I intend to give real power to the passenger: public hearings on rail and bus franchises; stronger bus and rail consumer bodies joining forces with real powers; a strategic rail authority with real teeth to improve standards for the passenger.
"Madam Speaker, this White Paper is the start, not the end, of the debate. It is almost 20 years since the last comprehensive transport White Paper. The speed of change means that we cannot wait another 20 years.
"Members will appreciate that I have touched only on the main points of the White Paper, which covers all forms of transport. There will be a number of 'daughter documents' similar to today's rail document, on roads, freight, aviation, shipping and others.
"Transport policy is not just a matter for government. The debate needs the involvement of all sections of society. The Government therefore propose to establish an independent commission for integrated transport which will monitor targets, provide a forum for debate and make regular reports to Ministers and to this House.
"Madam Speaker, the White Paper is based on a real consensus for change. No change is frankly not an option. The country wants a better transport system which does not continue to damage our health, industry and environment; a transport system which improves the quality of life for everyone without passing on a poorer legacy to future generations.
"Radical change is necessary. This White Paper is about that radical change and how to achieve it. I commend this White Paper to the House".
My Lords, that concludes the Statement.
4.56 p.m.
Lord Brabazon of Tara: My Lords, I thank the Minister for repeating her right honourable friend's Statement. We have waited a long time for the Statement. It was promised in the spring of this year.
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I know that spring came late and that that was not the Government's fault. We now have the Statement on what I hope is the first day of summer. I understand the reasons for the delay. My first question therefore is: whose White Paper is this? Is it the Deputy Prime Minister's, or is it the policy from the No. 10 Policy Unit with money from the Treasury?
Of course, we welcome some aspects of the Statement. However, do the Government accept that the previous government's 1996 Green Paper, referred to in the Statement, had already set out some of the proposals announced today—quality partnerships with local authorities in relation to buses and bus lanes are already happening. I also welcome the apparent disappearance of a proposed tax on parking at supermarkets. I hope that the Minister will confirm that that is no longer on the agenda.
Will the Minister confirm that the increase in spending on transport, announced by the Chancellor of the Exchequer last week, was a matter of creative accounting within the existing departmental budget and that the real increase is not the £600 million a year announced by the Chancellor but £7 million a year as calculated by the British Road Federation? Is it not the case that the so-called extra funding of £1.8 billion is made up largely from the proceeds of reducing subsidies to the privatised railways? Will the Minister confirm the Government's conversion to the cause of privatisation, given the benefits that our policy is affording them? Is it not a fact that all the money announced in the White Paper comes from the benefits of privatisation—from both the reduction in rail subsidies and as a result of the proposed privatisation of National Air Traffic Services?
Will the Minister confirm that all subsidy to London Underground is to be removed by the year 2000? Will she tell the House what assumptions have been made as to likely private investment in London Underground by the year 2000, and what contingency plans have been made if that investment fails to appear? What would be the effect on fares and overcrowding? Whose responsibility will that be? Will it be for the new mayor to pick up the tab if it all goes wrong?
Will the Minister confirm that the Government intend to fund their plans for improvements in transport infrastructure by imposing more taxes on road users? By how much will that taxation increase? How soon will the improvements be in place?
Will the Minister confirm the statement in an article in today's Financial Times that,
"The new charges will begin to provide funds from 2000–2001 but will not really bite until after the next election. They are expected to raise about £1 bn a year from 2005–2006"?
That seems a very long time to wait for the improvements.
How will the Government guarantee 100 per cent. hypothecation of these taxes, and what system will be put in place to ensure their transparency? The Deputy Prime Minister apparently said on the "Breakfast with Frost" programme yesterday that the Treasury had assured him that any money raised from these new incomes would now be channelled directly to transport policies. Can we be assured that that will be the case?

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Can we further be assured that VAT will not be added to these charges and that, if it is, it will not go straight to the Treasury?
What of the fuel-tax escalator? Will that now end or will it go on and on at 6 per cent. above inflation year on year, further increasing the money to the Treasury without bringing any improvements from that source to the transport system?
Do the Government accept that higher taxes for motorists will affect disproportionately women, the elderly, disabled people and people in rural areas, all of whom regard the car as a necessity and for all of whom safe and secure travelling by car is a major consideration?
Can I have an assurance from the Minister that when a local authority wishes to bring in congestion charging it will at least take into account the considerations of other local authorities? To give one example, is the noble Baroness aware that the vast majority of traffic to and from the Isle of Wight has to travel through the city centres of Portsmouth and Southampton? Can we be assured that any congestion charging by those two councils will not further add to the burden of a fragile economy which already has to bear the cost of the ferry journey?
On the question of the school run, much referred to, there is much to be welcomed in the proposals. But does the Minister recognise that for many parents—working mothers and indeed working fathers—the school run is only part of the journey to work? I hope that the Minister will take that factor into account in the proposals.
Can the Minister confirm that there will be an exemption from non-residential car-parking charges for health and education establishments? What other exemptions are planned? What about the car park outside this House? Who will pay non-residential car-parking charges for that? Will Members of another place be able to reclaim anything they are charged from the taxpayer?
How will the income streams generated by the new taxes and charges on motorists affect the department's assumptions for the distribution of other local authority finance in the form of the rate support grant and standard spending assessments?
Is the Minister aware that the increasing differential between United Kingdom and Continental diesel prices will, according to the Road Haulage Association, lead to the loss of 26,000 jobs in this country during this Parliament? What do the Government intend to do about that?
I give a cautious welcome to the statement that 41-tonne lorries on six axles are to be allowed from the beginning of next year. But why not go the whole hog now to 44 tonnes, as recommended by the Select Committee of your Lordships' House? How does the Minister think that the decision to allow 41-tonne lorries on six axles but not to give a decision yet on 44-tonne lorries will affect the investment plans of transport road haulage companies?
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Given that the privatised rail freight companies intend to treble the amount of freight carried by rail in the next 10 years, what further plans have the Government to transfer more freight from the roads? Will the Government recognise that the welcome increase in freight and the welcome target set by the rail freight companies are a direct result of the privatisation of the railway network?
Can the Minister assure the House that the strategic rail authority will not result in more bureaucracy for the industry and that it will not attempt to second-guess the commercial decisions by rail operators and thus damage the record investment taking place in both the track and operating companies?
The Statement mentions the Dartford crossing and the possible improvements to the M.25. Does the Statement mean that the bridge is no longer to become toll-free when the concession is over, as is presently enshrined in legislation? On that subject, can the Minister tell us when we can expect the other nine papers which are heralded in the White Paper, in particular the roads review which, no doubt, will contain news of the possible U-turn on the widening of the M.25?
Finally, can the Minister be more specific with the House and the nation? How will the success of these policies be measured? Will targets be set for the overall reduction of traffic growth and the increase in train and bus travel and the number of journeys made on bicycle and on foot? Or is this White Paper simply about setting new targets to tax motorists? Apparently, in another place the Deputy Prime Minister said following the Statement that no one would need a second car. Can I have an assurance that the Deputy Prime Minister and other Ministers will give up theirs?
5.6 p.m.
Baroness Thomas of Walliswood: My Lords, I approach this White Paper from a slightly different standpoint to that of the noble Lord, Lord Brabazon of Tara. It has been long awaited. It was preceded by a barrage of speculation about rival approaches to transport within government, and the usual barrage of leaks as well. It is 170 pages long and includes a most welcome index. The practice of including an index is something that all government departments might follow. It enables one to find one's way around a paper reasonably rapidly.
However, we have had less than an hour to look at the White Paper. Perhaps I may ask the Minister to use her endeavours to persuade the usual channels that we need a rather more profound debate on these major issues which affect everyone's lives every part of the day. I do not believe that the eight minutes or so that the noble Lord took are sufficient.
We have all known for a long time what the problems are: congestion, leading to pollution, severance and billions of pounds of costs to industry; excess mobility for some and reduced mobility for others. We have all recognised for some time that we cannot just build our way out of these problems. Local government has tried to respond many times in England and has made excellent efforts to cope with the problems of

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congestion. York is an example and Truro is another; one could cite Birmingham and Manchester and towns of different sizes. What has been lacking is an overall envelope of government policy to sustain and give long-term direction to the efforts of local authorities.
Another problem has been the arbitrary allocation of government financial support between transport objectives or even its total diversion to other heads of government expenditure whenever things become difficult for the general budget. The fact that the Government have recognised the problem and have committed themselves to an integrated transport policy should be praised; and I have often done so. But what does the paper tell us about the reality, or even the realpolitik, of this commitment? Does it pass the test? Some of the tests are matters such as whether we are really going for integration of modes and for better access for people with mobility problems. On the whole, the White Paper is quite good on that aspect. I like the commitment to a half-fare ticket for all pensioners which will help to reduce the inequalities between the provision in neighbouring local authorities, particularly odious to those who live around London some of whom have to pay full fare whereas Londoners do not.
The strategic rail authority is a good idea. We need to improve public transport. Anything that can be done to put the public interest back into the privatised rail companies should be supported by all of us. I hope that it can be done efficiently and without unnecessary bureaucracy. The point is to get public interest and public importance back into decision-taking with regard to rail.
Another test is whether there are traffic reduction targets. There are some targets, not so much for traffic reduction, but for freight growth, which other people have to satisfy. I do not see quite what the Government intend to do to facilitate that; perhaps the noble Baroness can respond. There are targets for accidents, which is not a new idea. I am disappointed that among other targets—including those for walking and cycling—the targets for road traffic reduction are still to be considered. Perhaps the noble Baroness can say for how long that consideration will continue.
There is some sign of another important aspect; that is, better enforcement of speed rules and HTV road worthiness rules. Those are welcome as part of an effort to make roads safer. Vulnerable road users will not use roads which are perceived to be or are in reality—there is little difference between the two—unsafe. Action must be taken to make roads seem safer. There are some signs of that. I confess that I have not read the entire report. I cannot be sure how far it goes.
I am delighted to welcome a commitment to improved planning policies to reduce the need to travel. Perhaps the Minister can tell us whether, taking the speed and planning policies, the Government are proposing to encourage low speed areas where children, residents and so forth, either on foot or on bicycle, have an absolute priority over cars which will be kept to a low speed limit.
Another question concerns where the money is going. The noble Lord, Lord Brabazon, was concerned about where it was coming from. As one reads the paper there
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are doubts as to whether the figures reflect new money, money that has already been announced, money that is added up from a number of sources and put into a box labelled, "This is something good", or whether we are getting new funds, particularly funds diverted from road building into road maintenance, cycle schemes, pavements and that sort of thing. I would welcome a response from the Minister in that regard.
There is some evidence of a willingness on the part of the Government to use elements of tax policy to support their transport policy. I welcome the ability on the part of local authorities to tax non-residential parking, to retain the fines from traffic infringements and to put them into ring-fenced funds for the use of local traffic schemes. On the other hand, the Government trumpet 150 traffic schemes funded from central sources. That does not sound to me an enormous number. I am interested to know whether it is a significant increase over the numbers funded in recent years.
The variable vehicle excise duty is welcome, particularly the higher rates for heavy goods vehicles that cause a great deal of damage. We would have suggested a lower lowest level because if VED were reduced far below the £100 minimum being considered at the present time, people in rural areas would be able to combat the increase in the cost of petrol. It would give a strong indication that the Government were taxing the use of the car rather than the ownership, which is another important point.
There are many subjects which other Members of your Lordships' House will wish to mention. I conclude by saying that I am glad to welcome the evidence in the report that this is not just a one-off Statement. Quite apart from the additional bodies mentioned—for example, the commission for integrated transport—there are elements of action which will carry us forward down the years so that the pressure upon a number of co-operating partners such as local government, industry and so forth, will continue to be led by government.
The devil in such a report is always in the detail. I feel that some of that detail is good. I am sure that there will be parts with which we disagree. As I said at the start, I hope that we shall be given an opportunity to debate it in greater detail at a later stage.
5.14 p.m.
Baroness Hayman: My Lords, I am grateful to both Front Bench speakers for their welcome, to a greater or lesser degree, for many of the proposals outlined in the White Paper, although the noble Lord, Lord Brabazon of Tara, was perhaps a little half-hearted in some respects. I make clear from the start that this is the Government's White Paper. It comes from the Department of the Environment, Transport and the Regions, but when one reads through the amount of interactions with other government departments it is clear that we recognise that transport and transport policy must evolve as a whole government policy.
The paper came out later than originally suggested—but a lot sooner than the 18 years during which the party opposite had time to create a White Paper and never

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achieved one at all. The fact that it has arrived within 18 months is not something for which I apologise. Also, the decision taken to publish it after the Comprehensive Spending Review was sensible. It allowed for some transparency and for the sorts of searching questions in relation to funding which came from the noble Lord, Lord Brabazon, and the noble Baroness, Lady Thomas.
Perhaps I should make clear in talking about figures—the noble Baroness asked me about those—that we are talking of £1.8 billion of extra money over the CSR period. We are talking of £700 million more for local authorities to establish 150 new local transport plans and to restore the cuts in maintenance to their principal roads. We must recognise in that sum of money and in the £400 million extra spending on the trunk road network that we have, sadly, a backlog of disinvestment that must first be put right. There will also be £300 million more for local bus services in addition to the £50 million a year for rural transport announced in the Budget.
There is to be £300 million additional resources for the rail industry, including support for the Channel Tunnel rail link, on top of the annual subsidy of over £1 billion to rail operators for existing franchise contracts. Those new resources will allow for extra freight grants and extra funds will be available from two new sources—the infrastructure investment fund and the rail passenger partnership scheme.
I must say to the noble Lord, Lord Brabazon, that that does not represent a conversion to privatisation; it represents making the best of a very bad job which we inherited. It represents also some value for the travelling public from the reductions that are at last being seen in the amount of subsidy going to the rail operators. What is different about this Government is that, unlike the previous government's plans, that money will not go straight back into the Consolidated Fund; it is being recycled into support for public transport.
The noble Lord, Lord Brabazon, suggested that the British Road Federation's £7 million was the increase. I suggest that he looks a little more closely at the real new money that is coming in, rather than taking sums that are bandied about by a lobbying group on behalf of investment in road building.
The noble Lord asked also about the taxation plans and the plans for congestion charging. On the issue of the fuel duty escalator, about which he asked specifically, we intend to continue the Government's commitment to increase road fuel duty by 6 per cent. above inflation every year. That is because its impact in the long run should not be too great when it is combined with the other measures in the White Paper to improve the fuel efficiency of vehicles. This work is taking place in the "CO2 from cars programme" and in the cleaner vehicles task force to encourage better public transport and to give people a real choice as to how they undertake their journeys.
The noble Baroness, Lady Thomas, asked about other fiscal incentives towards environmentally friendly transport policies. The Chancellor announced a raft of
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measures to encourage people to use their cars and to make their choices about buying cars in ways that reflect the need to reduce pollution, emissions and congestion.
I was asked about the funding of local transport plans. The 150 local transport plans in the CSR period will be funded through the additional money from the Chancellor under the Comprehensive Spending Review. In addition, we are looking at the possibility of local charging for private non-residential parking at workplaces or congestion charging. I was asked for an assurance that those would reflect local needs and that the money would go back into local transport schemes. That is precisely the agreement that has been reached. It is important to recognise that we are not talking about new national taxes. We recognise that different areas have different transport needs. The local transport plans will have to deal with both income and expenditure and they will not be approved unless we can see—and the public and the local community can see because they will be involved in drawing up the plans—that there is a clear correlation between any charging strategy and any strategy for investment in public transport. It is important to understand that point.
I was asked about the effect of our proposals on particularly vulnerable road users. The noble Lord referred to disabled people. The particular needs of disabled people and the details of any exemptions for, for example, hospitals will have to be looked at in the consultation document on congestion charging which we hope to issue very soon. While we recognise the needs of women who are worried about using public transport, of disabled motorists and of elderly people, it is important that we provide public transport that is safe and secure and is accessible for disabled people. We must look not only in terms of the car. We have to recognise that 30 per cent. of households in this country—some 13 million people—have no access to a car. They are already excluded. For them it is crucial that we improve public transport so that their mobility and their ability to participate in society to the full is increased.
I was asked about the strategic rail authority and it second guessing commercial decisions. That is not what the strategic rail authority will be there for; it will be there to provide clear, coherent and accountable planning and regulation to ensure that the railways are run firmly in the public interest and that rail freight is considered alongside the passenger railway.
I was asked specifically about rail freight. It will benefit from the investment fund that will be created to address pinch-points in the network. The commission for integrated transport will look at rail freight issues. However, the Government's record in improving both the amount of money available for rail freight and the take-up of it is a significant one.
The noble Lord, Lord Brabazon, asked why we had not gone for 44-tonne lorries immediately. We were looking in the round at the freight industry. It is important that we give a clear message about six-axle vehicles. In terms of the investment decisions that the road haulage industry will make, the point is made clearly in the White Paper that we are looking, through

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incentives, to encourage re-equipping on six axles. That is why we made the decision to go to 41 tonnes next year. The case for 44 tonnes will be looked at by the commission for integrated transport. We have to consider what would be gained by having fewer lorries on the road because of their having higher payloads if that were to be lost by the effect that had on the rail freight industry. That is a complicated calculation and one on which we need advice.
I was asked about the role of targets. Targets are a significant feature of the White Paper. There are local targets for air quality. We have targets for reducing emissions of greenhouse gases in the UK by 12.5 per cent. below 1990 levels by 2008 to 2012. The report of the Royal Commission on Environmental Pollution said that targets for road traffic reduction nationally must have a clear and specific justification. The transport commission will be looking at that. Meanwhile, these issues will be taken into account locally when local authorities are putting forward their local transport plans. I can assure the House that the CSR White Paper assumes that the funding of local authority packages from public funds will be broadly at current levels and that the new charges will be additional to that.
The noble Baroness, Lady Thomas, asked about vulnerable road users and about the potential for creating areas in communities that are sometimes called home zones. We have asked local authorities whether they would like to put proposals to us for such schemes. These schemes would not need a change in legislation. One of the important considerations is the review of speed policy set out in the White Paper. That is important because it reflects not only a concern with speed as an issue in safety but also as a consideration in terms of people being less willing to cycle, less willing to walk and less willing to allow their children to go to school by themselves and in terms of CO2 emissions because of the speed at which vehicles are travelling and also in terms of noise. We are looking at the review in the round.
I have spoken for too long and have probably reflected the noble Baroness's view that a Statement is not the best way to deal with this matter. I, too, would welcome an opportunity to speak at greater length.
5.29 p.m.
Lord Berkeley: My Lords, I very much welcome the White Paper of my right honourable friend the Deputy Prime Minister. He hit the nail on the head when he said that 13 million people do not have access to cars and that that has to be provided for.
As chairman of the Rail Freight Group, I welcome what the Minister and the Statement say about rail freight and, in particular, about the Euro-gauge project, where I think they probably mean piggy-back. That is a great step forward. The Statement says that the Highways Agency intends to operate a pilot charging scheme to re-invest in the road network. I find that very interesting. As the Highways Agency and Railtrack have made an historic agreement to work together for integrated transport, does my noble friend see any
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means by which some of the revenue from such a scheme could be invested in an integrated transport scheme?
Baroness Hayman: My Lords, my noble friend is right in terms of Euro-gauge meaning piggy-back. The opportunities are extremely exciting. The White Paper looks at the possibilities for pilot schemes for charging on the trunk road and motorway network and for recycling that revenue. Within the new remit for the Highways Agency we have a new strategic aim and objective. We are looking at its role as a provider within an integrated transport framework. That money can be spent on performing that role rather than on the more traditional roadbuilding role as in the past.
There are many exciting things that we can do in terms of traffic management, regional control centres, better information for motorists and to encourage modal shifts from road to park-and-ride and then on to rail. There are opportunities. We need to look at pilot schemes very carefully because we also have to recognise that we do not want diversion on to unsuitable local roads. Therefore we have to assess schemes carefully.
Lord Geddes: My Lords, the noble Baroness is to be congratulated not only on repeating the Statement but on having the stamina to do so over 15 minutes. I warmly support the noble Baroness, Lady Thomas of Walliswood, in requesting that the usual channels consider together so that we get some time to debate. This document contains 162 pages even if one disregards the index. One cannot hoist it all in in an hour. The document contains a great deal of very important information and very important ideas. I ask the Minister to try to make the best overtures she can in that respect.
In the interests of the House and speed, I have one general and two specific questions. As regards the general question, can the Minister advise the House when we can expect to receive what are delightfully described as the "daughter documents?". I do not believe that I have ever come across that expression in these circles before. It is rather nicely put. Can she advise us when those documents will be available?
I have two specific points. When discussing the tougher regulation of train companies and the strategic rail authority, the Statement says most interestingly,
"If these companies"—
by that I assume is meant the train companies—
"continue to fail the passenger, they will lose their right to operate".
Does that mean within the period of the franchise or at the end of it? That could set all kinds of warning bells ringing within franchise operators.
My second specific question to the Minister concerns the part of the Statement which says,
"We have already doubled rail freight grants. We will increase them by a further one-third this year and extend them to coastal shipping".
Does "coastal shipping" mean what I believe is termed "short-sea shipping" or does it mean "coastal shipping?" To put it more succinctly, does it include trans-North

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Sea or simply include around the coast of the United Kingdom? I hope that the noble Baroness can enlighten me.
Baroness Hayman: My Lords, I have to confess to the noble Lord that I was trying not to say coastal shipping and short-sea shipping for very good reason. I can assure the noble Lord that it will apply to both. In the interests of completeness we shall look at encouraging the take-up of freight grants which are available for inland waterways and which do not need an extension. They are not well taken up at the moment.
As regards the franchises, it is important that we make quite clear the standards that are expected of franchisees and also the standards expected of those who wish to renegotiate their franchises. As the noble Lord said, there are important messages here. I want to be absolutely clear. I shall write to the noble Lord with the detail.
Lord Geddes: My Lords, can the Minister say anything about the timing of the "daughter documents?"
Baroness Hayman: My Lords, I thought that that was a European phrase and I would expect the noble Lord to be well acquainted with it. The daughter documents will be out very soon; the first one on rail came out today. I hope that we shall see the document on roads before the House rises. There is a document on buses which it is important to get out soon. There is another on sustainable freight and distribution. Within the next weeks and a couple of months we shall see a great many of these documents appearing.
It is slightly more difficult as regards airports. A large-scale Statement on airport policy will have to await the outcome of the Terminal 5 inquiry because we do not wish to prejudge it. So there are issues of timing, but the main daughter documents will be out soon. The consultation document on the detail of congestion charging will also be out soon.
Baroness Ludford: My Lords, can the Minister tell us more about the thinking on integrated ticketing, particularly for single journeys? It is most welcome that the White Paper refers to the matter, but the Statement does not. Nor, curiously, does the report on consultation.
A great deal of the debate is on macro issues such as investment. But the micro issues on subjects such as ticketing have a big impact on the willingness of people such as those being asked to leave their cars at home on some days and not the whole week. Does the Minister accept that for London—which is the area I know—the people who do not travel enough to justify a travelcard find the Underground arrangements totally inadequate? We need solutions like strip cards and carnets if people are to be persuaded to travel on a one-off basis.
Can the Minister also try to dissuade London Underground enforcing its deeply resented £10 penalty fare until it can guarantee ticket machines that work and do not show "Exact money only" when one has queued for five minutes or those which say "closed"? There are
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also platform ticket machines and the question which arises when one changes one's mind about the destination between Zones 1 and 2. There should be carnets for Zones 1 and 2 and other convenient flexible arrangements. I believe that that is referred to in the White Paper. There is also the ability to pay by cash on horrible one-person operated buses. One cannot even buy a one-day travelcard on a bus. All these matters have a very big impact on the willingness of people to undertake single journeys. Can the Minister say more about that and whether the commission on integrated transport will look into these matters.
Baroness Hayman: My Lords, the noble Baroness is right to identify these issues as important. In London the specifics will be a matter to which the mayor and assembly should give their attention very early on in the process. There are many things that have to be ironed out. We expect local authorities, when preparing their local transport plans, to consider the arrangements for through-ticketing and for travelcards. We shall be publishing advice on good practice because that is available. The necessary powers should be available locally to require operators to promote and participate in joint ticketing and travelcard schemes. There have been difficulties with different bus operators in some areas. It is important to get them to participate. We shall make sure that they do, so that multi-operator ticketing schemes will be available.
We are also looking to the bus industry to introduce simpler fare structures and through-ticketing, where necessary, in conjunction with local authorities. There are opportunities available because of technology. We should make the most of smart cards. We are looking with the key players in the industry both to identify the potential benefit for integrating journeys and to see exactly what role the Government should play in helping to bring forward the kinds of applications we need.
Lord Beloff: My Lords, is the noble Baroness aware that there is a contradiction at the heart of the Statement between its accent on safety and its encouragement of the use of the bicycle? As an elderly and infirm pedestrian, I am not troubled that a motor vehicle may mount the pavement and knock me over, but I am constantly in fear of cyclists on pavements. Would it not be a good idea to insert into criminal justice legislation a provision that cycling on the pavement is a major criminal offence?
Baroness Hayman: My Lords, I can reassure the noble Lord that frantic cycling is an offence and one on which the police can issue on-the-spot fines and tickets. I appreciate the concern of pedestrians about frantic cycling and their feeling that they are vulnerable road users in relation to cyclists. However, it is important to give cyclists, who are themselves vulnerable in relation to motorcyclists or car drivers, proper safe cycle routes where they will not be a danger to those using the pavement and where they will not themselves be in danger.
The noble Lord says that there is a contradiction at the heart of the White Paper. He raised a conundrum that we must address. I refer to the fact that we do not

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want to see increases in cycling and walking at the expense of higher casualty rates. However, we also recognise that we shall not see those wished-for increases unless we provide a safe and secure environment in which people can use other modes of transport. That is particularly true when it comes to parents encouraging their children to walk or cycle to school. Parents will not do that unless we have made proper, safe arrangements. I mean "safe" in the broadest sense—not only in terms of road safety, but in terms of community safety also. That is why it is tremendously important to look carefully at the question of safe routes to school. It is not simply a question of lecturing people about leaving the car at home but of enabling people to do what they recognise is for the benefit of themselves and their children—and they do not do that at the moment because of the downsides.
There are some shining examples around particular schools and in particular local authorities which show that we can square the circle between safety and increased cycling and walking. We must do so, however, with the appropriate engineering and enforcement measures in place. There must also be attention to local detail.
Lord Desai: My Lords, as one who does not have a car, I greatly welcome the White Paper. Perhaps I may draw my noble friend's attention to the fact that those of us who use the buses have very different needs at different times. When travelling to work, we need speed and reliability, whereas shoppers using the buses do not need speed quite as much as they need comfortable buses on which it is easy to load their shopping and their children. Will my noble friend draw the attention of the commission on integrated transport to the fact that differently shaped buses are required at different times of the day and in different areas? I believe that that is possible with the new technology. Anyone who has seen a mother with two children and two shopping bags trying to get on to a single-operator bus will know what I mean.
Baroness Hayman: My Lords, I must advise my noble friend that when I shop, I certainly need speed—and not only when I go to work. But that may simply reflect the reality of women's lives! I take my noble friend's point. His concerns lie behind the challenge which my right honourable friend put today to the bus industry. There are wonderful examples of buses which are accessible to people in wheelchairs, with pushchairs or with large amounts of shopping. However, investment is needed to ensure that such buses are available to everyone and, as my noble friend pointed out, they are reliable, whatever the journey. That means giving buses priority. It means more bus lanes and better enforcement of those bus lanes.
Lord Clark of Kempston: My Lords, does the Minister realise that I am "allergic" to cyclists and that it is not a question merely of providing cycle lanes, but, as my noble friend Lord Beloff said, of preventing cyclists riding on the pavement and jumping the traffic lights?
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With regard to taxation on non-residential parking, does the Minister agree that if such a charge is levied on Members of both Houses of Parliament, that will amount to taxpayers making direct payments? Presumably, for businesses, any such charge will be allowable for taxation purposes, which means that the taxpayers again will pay for that loss of corporation tax on the profits of the business. Will the Minister explain whether the money allocated to the new fund—"ring-fenced" as the Minister said—will be the gross amount or the amount net of tax?
Baroness Hayman: My Lords, that detailed question shows why there has to be a consultation document on the proposals and on, for instance, the question of possible exemptions, which was raised by the noble Lord, Lord Brabazon of Tara. On the general principle of workplace parking, I do not think that it is right that we should talk about government exemptions—quite the opposite. The Government should be leading by example. The main government departments have already been consulted on "green commuting" plans. They will be expected to draw up such plans and to consider how their workplaces can encourage sustainable transport policies. Such plans are expected to be in place by next year. All government departments will be expected to have such plans in place by the year 2000. It would be foolish of me to talk in detail about parking charges for your Lordships' House—and even more foolish to do so in connection with another place. However, any exemptions would have to be very well argued.
Lord Hunt of Kings Heath: My Lords, I welcome the Statement, and especially the fact that my noble friend has laid down the foundations for the long-awaited integrated transport policy. Does my noble friend accept that, as a cyclist, and as somebody who has never—or hardly ever!—ridden on a pavement, I feel something of an endangered species in your Lordships' House? Does my noble friend accept that although we should be encouraging cyclists to obey the law and to use the roads safely, that would come much easier if facilities for cyclists were much improved? At the moment, the behaviour of many motorists does not encourage cyclists to behave sensibly themselves.
Does my noble friend accept that her remarks on home zones have been very encouraging? I refer particularly to the fact that local authorities are being encouraged to consider whether they could adopt home zones in some of their districts. That adoption would be welcome as it would encourage parents to allow their children to play out in the neighbourhood of their own homes again rather than being cut off and not allowed to go out. If local authorities say that home zones are difficult to implement without legislation, will my noble friend consider bringing forward legislation to enable such zones to be implemented effectively?
Baroness Hayman: My Lords, we need to look at this stage by stage. We are already facing quite a legislative programme as a result of the White Paper. A great deal can be achieved. If it emerges that there are

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gaps in the present legislative framework which make it impossible to enjoy the sort of benefits to which my noble friend referred, we would have to address them.
With regard to my noble friend's comments about cycling, it is a shame when something is always somebody else's fault. There is a shared responsibility here. Everyone has to behave responsibly. Pedestrians, cyclists and drivers all need to behave responsibly. In our review of the driving test and of the question bank for the written driving test, we are trying to ensure that more emphasis is given to alerting drivers to be aware of the needs of vulnerable road users, whether cyclists, horse riders or pedestrians. In the past, that has sometimes been neglected.
Lord Marlesford: My Lords, I am glad that cycling has been mentioned. Will the Minister consider making cycling policy one of the daughter documents? At the moment, it does not appear on the list in Annex A. Cycling policy is most important. I am glad that my noble friend Lord Beloff feels that it is at the heart of the White Paper; my worry is that it is not. However, there is much scope in the White Paper and there is much that could be done. Perhaps I may remind the Minister of the words of one of the most effective Ministers of Transport we have ever had, Mr. Ernest Marples, when we were young—some of us very, very young—that it is action, not words, that counts. It is what you do, not what you say, that matters.
Baroness Hayman: My Lords, the White Paper provides a long programme of action as well as a good number of words. The Cycling Strategy Group drew up targets to increase cycling and they are endorsed in the Statement. Very much in line with what the noble Lord has said, when we look at the advice given to local authorities in terms of outputs from local transport plans, the proof of the pudding will be in the eating. Wherever a holistic approach has been taken to transport needs in a particular area the encouragement of cycling in a safe environment has had enormous benefits both for individuals and communities. As to the role of the Highways Agency a lot more can be done to make cycling safe, even on trunk roads. That is one of the responsibilities to be taken on by the Highways Agency.

International Criminal Court
5.50 p.m.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, with the leave of the House, I shall now repeat a Statement on the International Criminal Court which is being made in another place by my right honourable friend the Foreign Secretary. The Statement is as follows:
"Madam Speaker, it has been the policy of this Government to back the creation of an effective International Criminal Court. I am pleased to report to the House that in Rome on Friday Britain was part of the overwhelming majority that agreed to set up
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such a court. It has been a paradox of our century that those who murder one person are more likely to be brought to justice than those who plot genocide against millions. The International Criminal Court will put on notice the Pol Pots and the Saddam Husseins of the future that they may be held to account personally for the crimes against humanity that they instruct others to carry out. And it will offer justice to the victims who have no means at present of bringing their suffering before any court. I ask the House to place on record my appreciation of the hard work by the British team through five weeks of difficult and intensive negotiations. The firm support given by Britain to the principle of an International Criminal Court and the leading role played by our delegation in brokering a consensus contributed to the successful outcome of the Rome conference.
"The result is a strong court with wide powers. The court will have the power to try cases of genocide, war crimes and crimes against humanity. These will include crimes of sexual violence, such as the use of mass rape as an instrument of ethnic cleansing of the kind practised in Bosnia. It will also be an offence liable to prosecution before the court to conscript children under 15 into military service.
"The British delegation played a key part to secure a definition of war crimes which embraces internal conflict, not just wars between states. This is of great importance, as most of the violence of the past two decades has arisen from internal not external conflicts. The British team also took the initiative in proposing that the court should have power to order those who are guilty to pay reparations to those who were their victims. This is a new power which is not available to the current tribunals on the former Yugoslavia and Rwanda and reflects the fact that those who abuse their power to commit crimes against others often also abuse their power to make themselves wealthy. We consistently rejected attempts by other countries to give the court the power of the death penalty and were successful in maintaining a majority against an international body having the power to order the death penalty.
"Much of the debate in the period running up to the Rome conference revolved around the independence of the prosecutor. I am pleased to report that with British support the prosecutor will have the power to initiate investigations leading to prosecution on his or her own authority. States which are party to the treaty can also refer alleged crimes for investigation, but the prosecutor can take the initiative without waiting for such a referral.
"It has been our objective from the start to secure maximum support for the International Criminal Court. To be credible such a court must command substantial support in the international community. I have to say to the House that the final vote in support of the court by 120 votes to seven exceeded our expectations. The large number voting in favour was in part a reflection of the comprehensive international presence at the Rome conference, which was helped by the financial support Britain and others provided to the costs of attendance of 50 smaller and

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poorer states. In order to build that overwhelming support it was necessary to meet the concerns of a number of countries who supported the International Criminal Court in principle but had reservations about its proposed procedures. In particular, it was necessary to agree that countries signing up to the court should have the right to claim immunity from prosecution from war crimes for a period of up to seven years. That immunity is time-limited; it does not extend to the rest of crimes within the remit of the court such as crimes against humanity; and it can in any event be overridden by a resolution of the Security Council. It is much more restricted than the initial bid by a number of countries which wanted an indefinite right to opt-out from any of the crimes within the remit of the court.
"I understand the regrets of those who would have preferred there to be no such reservation, but I firmly believe that it was right to make a limited compromise in order to secure wider support for the court and thereby achieve greater credibility for its authority. I am sorry that at the end of the Rome conference the United States felt unable to support the compromise proposals. I understand the concerns of the United States over the security of its servicemen who are posted abroad, but we believe that those concerns are misplaced. Britain also has a large number of servicemen in posts abroad and we and other major NATO allies are satisfied that the safeguards built in to the International Criminal Court will protect our servicemen against malicious or politically motivated prosecution. In particular, it is a clearly established principle of the court that it will be able to prosecute only when there is no remedy in national law. We are confident that we can demonstrate that there is a remedy in British and, for that matter, in United States justice for accusations made in good faith against our servicemen. The screening of cases by the pre-trial chamber of the International Criminal Court will provide a safeguard against accusations brought in bad faith. We will continue to seek, through close dialogue with our United States partners, to bring them on board for this improvement to international justice which has gained such overwhelming support from the rest of the international community.
"Later this year the world will celebrate the fiftieth anniversary of the signing of the Universal Declaration of Human Rights. There can be no more fitting way for us to mark that anniversary than by this agreement which, for the first time, creates an international court to enforce the most fundamental of those rights. I hope that it will secure support in this House as overwhelmingly as it has already done in the international community".
My Lords, that concludes the Statement.
5.58 p.m.
Lord Kingsland: My Lords, I congratulate Her Majesty's Government on bringing the negotiations in Rome to a successful conclusion. In doing so, they have increased my already considerable admiration for the noble and learned Lord, Lord Archer of Sandwell. Many
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noble Lords will recall that on 9th June this year the noble and learned Lord initiated a debate on the Rome negotiations. Six weeks later we find that 120 countries have agreed with nearly all that he proposed—almost in the manner of a Mexican wave.
I am also very pleased for the noble and learned Lord, Lord Shawcross, who began this campaign when he was Attorney-General at the time of the Nuremberg trials. That it has at last reached fruition must give him enormous satisfaction.
There are many aspects of this agreement that represent a remarkable achievement. The Minister has referred to some of them. In particular, I emphasise the fact that the agreement will apply to internal conflicts. So many of the modern conflicts in which atrocities are committed are internal. That the law will now apply to such conflicts represents a massive advance. Those states which have signed up to this aspect of the agreement are to be warmly congratulated. I know that the United Kingdom negotiators played a leading part in that.
It is also extremely good news that the prosecutor in proceedings before the court will act entirely independently of the influence of individual states. There was a fear earlier that no prosecution could be initiated without the permission of the state on whose territory the alleged atrocity was committed or by whose nationals the atrocity was alleged to have been committed. It is a great achievement to have got round that problem.
It is also a great achievement to have put in plan a pre-trial inquiry to wash out of the system any bogus allegations. I had hoped that this pre-trial inquiry would have been sufficient to allay the fears of the United States. We all regret that that country is not participating in this.
Speaking personally, although not everybody in your Lordships' House will agree, I am pleased that the Government resisted pressure for the death penalty.
There is, however, one immense drawback and one matter which will need the most careful consideration by Her Majesty's Government over the next few years. The drawback is that there is a seven year prohibition on the instigation of any prosecution for war crimes. The great strength of the Nuremburg trial was the fact that it caught the big fish; it did not just catch the "bit part players". That is what gave the Nuremburg process its real credibility. That is what enabled Germany to reconcile itself to what happened during the war.
The great failure of the War Crimes Tribunal in Bosnia is that the big fish have not been caught. The feelings in that country are as bitter as ever about what happened. Unless the big fish can be caught in a country where these awful crimes have been committed, the major object of an international court against war crimes—which is to reconcile the victims to the awfulness of what has happened to them—will never be achieved. The failure to arraign Mr. Milosevic for what has happened on the former territory of Yugoslavia is perhaps the chief reason that there are still tensions in that area. Until we can find a way of achieving that, those tensions will continue.

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I should like to ask the Minister what plans the Government now have to initiate a series of procedures which will ensure that war criminals and those who commit acts of genocide are brought to justice. Will the Security Council, for example, be given powers to require member states which are hiding or harbouring alleged war criminals to extradite them and bring them to justice? What sort of provisions will be made to ensure that witnesses can come freely to give evidence without fear of the consequences? What guarantees will there be that the trial will be fair and above board? The devil is in the detail and there is much detail to be decided before we can be confident that this new mechanism will work.
I have one final thought and it is this. The work of an international criminal court is inevitably ex post facto. The crimes have already been committed. The main aim of international society must be to prevent those crimes happening in the first place. Sometimes that requires the application of force at the right moment. The great tragedy of the former territory of Yugoslavia is that the Security Council and NATO have not had the courage and the vision to use force at the right time. We now have another opportunity to take that decision at the right time for Kosovo. I hope, following the example of the excellent work Her Majesty's Government have done in establishing an international criminal court, that they will take the lead in this matter as well.
Lord Lester of Herne Hill: My Lords, I am sorry that my noble friends Lady Williams of Crosby and Lord Avebury cannot be here to say what I am now going to say from these Benches. It gives me enormous pleasure to be able to agree both with what has been said by the Minister and what has been said by the noble Lord, Lord Kingsland. I agree with everything they have said.
Perhaps I may begin by expressing gratitude to the Government for having made this Statement to both Houses. In a very crowded parliamentary timetable it seems to me to show a civilised sense of priorities that on this historic day both Houses of Parliament have been informed.
As the Minister said, this is an historic occasion, particularly opportune during the year of the 50th anniversary of the Universal Declaration of Human Rights, 100 years after the International Red Cross first proposed that there should be an international criminal court. We had thought, after the Second World War and Nuremburg, that we would put behind us gross violations of human rights, crimes against humanity. But, as the Secretary-General of the United Nations reminded us:
"Our time—this decade even—has shown us that man's capacity for evil knows no limits".
That is the importance, I think, of setting up this independent new powerful International Criminal Court.
I should like to pay tribute to the hard work done by an outstanding British negotiating team in Rome, including two remarkable members of the Government's legal service, the Foreign Office legal adviser,
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Sir Franklin Berman QC and Mr. Christopher Muttukumaru, the former legal adviser of the Ministry of Defence. I should like to pay tribute also to the tireless efforts of human rights NGOs which have pushed and prodded governments over these past many years.
I think that the statute is a fair and reasonable compromise and I agree with the Government as to why it is necessary to reach that compromise to obtain the widest possible consent among the countries of the world. It is regrettable that among the handful of countries that have not signed should be three great democracies: one of the oldest, the United States; the largest, India; and one of the smallest, Israel. It is particularly regrettable because none of those countries has anything to fear or to hide in relation to this jurisdiction.
The United States taught the rest of the world a great deal about the principles of due process and the rule of law. India has a great independent judicial system, as has Israel. Indeed, many Jews were among those who after the Second World War fought tirelessly for the creation of an international criminal court. I therefore very much echo the words of an editorial in today's Financial Times expressing the hope that the super-power of the United States—and I would add India and Israel—seeing itself as a guardian of the world's conscience should think again otherwise, in the case of the United States, it could jeopardise its claim to the high moral ground in international affairs.
Perhaps I may say that it was useful to have been able to obtain a copy of the statute on the Internet this morning. It is a fascinating document. I hope that the Government will ensure that hard copies are made available with an explanatory memorandum before there is full parliamentary scrutiny and debate.
I should like to ask one or two questions. The first is on the timetable for ratification. I gather that 60 states need to ratify before the statute can come into force. Will the Government do everything they can to ensure that there is no unreasonable delay in ratification either by us or by the rest of the world? Secondly, does the Minister agree that the role of national courts is of critical importance, as well as that of the International Criminal Court, in providing effective domestic remedies so that there is no hiding place for those who commit crimes against humanity or war crimes? Does the Minister think that the example set by Denmark in prosecuting alleged war criminals accused of crimes in former Yugoslavia is a model that might be emulated elsewhere?
Will the requirement in the statute that a state must have consented to the court's jurisdiction be a serious hindrance to the universality of its jurisdiction?
Finally, perhaps I may say a word about the judges. Obviously the quality of the 15 judges is crucial. The statute uses fine language about the quality of the judges. They must be of high moral character, impartiality and integrity, with qualifications required for appointment to high judicial office in their own countries, and so forth. The statute says the right thing. Will the Government do whatever they reasonably can

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to ensure that the 15 judges will be of the highest quality so that we have a court of which the world can be proud and in which we can all have confidence?
Baroness Symons of Vernham Dean: My Lords, I thank the noble Lords, Lord Kingsland and Lord Lester of Herne Hill, for their support for the Statement. I endorse what the noble Lord, Lord Kingsland, said about my noble and learned friend Lord Archer of Sandwell and the 9th June debate. I also thank both noble Lords for the warm words they spoke about the civil servants who have laboured hard in the past five weeks in Rome to secure an agreement, sometimes against tricky odds. The agreement was consistent with the negotiating remit that the Government had set them. It was a difficult remit which we are pleased to see they were able to meet in large measure.
I thank the noble Lord, Lord Kingsland, for what he said about the negotiations on the internal conflicts and the independent prosecutor. We all feel that they were important points to have secured. The noble Lord mentioned the seven-year period—I think that he used the word "prohibition"—as something of a drawback. I would not describe it as a prohibition but more as an opt-out. States "may", in ratifying the statute, opt out of the court's jurisdiction for seven years, but that period is not renewable. After that, so long as they do not withdraw completely from the treaty, states parties will have to accept the court's jurisdiction with regard to all crimes included in the statute. That was an important point, because we did not want cherry-picking of the treaty.
I take the point that for some the seven-year opt-out will be a disappointment. It was a concession made during negotiations, because it was felt important to secure the maximum number of countries agreeing to the treaty. It was a different negotiation from the one which some countries had wanted, which was to be able to specify with which parts of the treaty they would comply and with which parts they would not comply. Her Majesty's Government felt that that compromise was worth making.
The noble Lord also spoke about the drawbacks in the way in which some war crimes have been dealt with as regards the former Yugoslavia. Her Majesty's Government do not believe that the ICTY has been a failure just because it cannot get hold of some of those whom we would like to see prosecuted. We are pleased with the progress that the tribunal is making, because since last summer a steady stream of indictees has been transferred to the tribunal. One contested verdict has already been handed down; seven indictees are currently being tried; and 13 more are awaiting trial. Trials are proceeding more rapidly now that the UK-funded courtroom is in operation.
The noble Lord, Lord Lester, raised a number of interesting and important points and said some nice things about our negotiators in Rome. I shall try to cover the points that he made. Of course we are concerned about the fact that the US and other important countries were not able to support the treaty. As I explained in the Statement, the US is anxious about the vulnerability of its servicemen. The UK has worked hard with the US
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to try to address those concerns. We are confident that the US has sufficient safeguards within the terms of the agreement. One of the matters that was important was the point that the noble Lord brought out about the position of domestic law. The main safeguard is the provision that the court could not act against our nationals or indeed against US nationals unless we or they were unwilling or unable to mount a national investigation.
We hope that the US will realise that there are comprehensive and sufficient safeguards. We in the UK will work hard to try to persuade the US to sign up to the agreement. There are also other countries—we are sorry that India and Israel are among them—which were unable to support the final package. Of course their support is highly desirable. We shall continue to urge them not to stand in the way of the rest of the world going forward on this issue. We hope that when they see the way that the international court operates many of their fears will be allayed.
The noble Lord asked also about the quality of judges. The judges are an important issue. It is one of the points upon which the leader of our delegation, Sir Franklin Berman, concentrated. He chaired the working group on that issue. We believe that we ensured a useful agreement on that point. At least half of the judges will have criminal trial experience. That is an important point. There are also provisions to ensure that only judges of the highest calibre are nominated for election. The elections must take place on merit. We hope that some good women judges may be among those whose merits are recognised.
I shall say a few words about the court being less effective than it might be because of the countries that have not signed up to the treaty. The court will be able to act if the state in which the alleged crime was committed or the state of the accused's nationality is a party to the agreement. That is an important factor: both points are important here. Some states wanted the court to have automatic jurisdiction over crimes taking place anywhere in the world, but there is a problem of legal principle in creating a court with jurisdiction over states which have not signed up to its jurisdiction. Nevertheless, as I have said, we hope that we shall persuade those states that felt unable to sign up at the moment that it is in their best interests to do so. We shall go forward on that basis. I thank both noble Lords for the warm support that they gave the Statement.
6.17 p.m.
Lord Archer of Sandwell: My Lords, will my noble friend accept on behalf of the Government and the negotiating team my congratulations on the positive role that they have taken and on augmenting the respect that they have built up over the past 18 months among the NGO community? Will she get a message to the US Government that not only has it cast a shadow over a significant milestone in human affairs, but it has forfeited the respect in which it was previously held by the NGO community? Will she tell the US Government that those of us in this country who have, for a long time, regarded ourselves as friends of the US, find it

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difficult to say anything in its defence on this matter, and that unless it joins the régime it will find itself in some dubious company?
Baroness Symons of Vernham Dean: My Lords, I am delighted to accept my noble and learned friend's congratulations. I shall ensure that those to whom they are properly due read the appropriate passages in Hansard. My noble and learned friend then went on to say some pretty trenchant things about the US. I hope that I have explained the concerns of the US with regard to the treaty. They are genuinely felt. We do not believe that they are necessary. We believe that the treaty covers the genuine concerns felt by the US. The more constructive way to go forward on this is by persuasion rather than confrontation. We shall speak to the US as a good friend of justice throughout the world. We hope that the US will gain confidence by seeing how many countries can ratify the treaty, and that in due course it will be persuaded to take the same view as the UK Government.
Lord Renton: My Lords, I, too, wish to pay tribute to the Government and those who have helped them in this great matter. It did not surprise me that the Minister mentioned the noble and learned Lord, Lord Archer of Sandwell. He is an old friend and has played a valuable part. I wish to endorse a question that he put about the United States. Is it not strange that the United States, which played such a vital part in establishing the United Nations and in attempting to uphold international law, should not be willing on this occasion to take a positive step towards upholding it?
Perhaps I may ask two questions about enforcement. First, I am glad that the prosecutor is to be an independent person. But he will need to have an enforcement agency, just as the Crown Prosecution Service in this country relies upon the police as an enforcement agency. I give that as an example. What enforcement agency will be at the disposal of the prosecutor bringing cases to this court?
My second question is on enforcement by the court of its own decisions. That may be too complicated a question for the noble Baroness to answer, but it is important that we know how the decisions of this criminal court are to be enforced, otherwise its jurisdiction will be not be effective.
Baroness Symons of Vernham Dean: My Lords, I thank the noble Lord again for his kind remarks.
I recognise the concern in your Lordships' House about the United States not being willing to sign up at present to the provisions of the treaty. Having talked through these matters, the negotiators believe that the remaining differences with the United States are relatively few and that the gaps in the negotiating positions are already narrower than they were; and we must hope that they continue to close even further.
Of course we hope that the United States will see that the safeguards in the statute are comprehensive and sufficient and that it will be willing to work hard towards the goal that we believe is so important. Even
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if that proves impossible, we confidently expect that the court will persuade doubters by the way in which it works in practice; and that international support for the court will grow progressively when countries which have not found it possible to sign up at this stage see the way in which it works.
The noble Lord asked a number of questions about enforcement. The court will be backed up. Three of the five Permanent Members of the Security Council support the treaty. I make that point because in the end these issues may well come back to the General Assembly of States Parties to consider enforcement if enforcement is for any reason flouted by any of the states parties to the treaty. There will of course be recourse to the states parties through the General Assembly.
However, perhaps I may say this to the noble Lord. I shall arrange for the document on the treaty, which is very detailed, not only to be available on the Internet, as the noble Lord, Lord Lester, said it was—and these days the Foreign Office is looking much more modern than it used to—but also ensure that a hard copy goes into the Library of the House. I hope that the noble Lord will then be able to look at a number of detailed provisions in the hard copy that I shall make available in the Library of the House.
Lord Kennet: My Lords, I join with others in congratulating the Minister on what she has said. It is remarkable, and a matter for general rejoicing, that on two successive sitting days my noble friend has been able to introduce measures of one kind or another which distinctly and successfully take mankind further from the routine horrors of war. While there is still some way to go, it is an achievement.
I know that the issues of landmines and this court have been close to the heart of the Foreign Secretary and his team since the election and before. I have two questions. First, can the noble Baroness cross the t's and dot the i's about the arrest of suspected alleged war criminals who happen to be nationals of non-signatory countries? Is that absolute? If all the signatories and the full court agree that a person should be tried, and would be tried were he not American, Indian or Israeli, for instance, is there nothing more to be done about it? As a subsidiary question, let us suppose that a crime has been committed by a Trobriand Islander on the soil of the United States, Israel or India. Is there nothing to be done about it?
Secondly, when does the moratorium, the seven-year amnesty, the advance pardon—whatever we like to call it—begin? Has it begun already? Can it by any chance be interpreted to have begun a year or two ago, because that would be convenient and shorten an absurd interregnum? Alternatively, must we await some further decision before it begins?
Baroness Symons of Vernham Dean: My Lords, I thank my noble friend. It has been a great pleasure to introduce legislation last Friday and to make the Statement today. The Statement is consistent with what the Government said in their pre-election manifesto. I hope that Members of your Lordships' House will be

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as pleased on the coming Friday about what we have done on landmines as the noble Lord indicates he already is.
The noble Lord asked from when the opt-out runs. It runs from the date of the ratification of the agreement. A country that is ratifying the agreement may at that point declare its opt-out for seven years.
The noble Lord also asked what would happen to those individuals who were nationals of countries which had not signed up. It is important to be clear on this point: that the court is able to act if either the state when the alleged crime was committed, or the state of the nationality of the accused, is party to the court. It might not be that the individual was a national of a country which had signed up to the agreement. It might be that he had committed the alleged crime in a country that is a party to the agreement.
However, I must make one further point to the noble Lord. The Security Council acting under the UN charter may refer situations to the court regardless of where they occur. That is an important point for your Lordships to remember in this respect.

National Minimum Wage Bill
6.27 p.m.
Consideration of amendments on Report resumed.
The Deputy Speaker (Lord Elton): My Lords, before I call Amendment No. 6, I should advise your Lordships that if it is accepted, I shall be unable to call Amendment No. 7.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 6:
Page 2, line 34, leave out subsection (7).
The noble Baroness said: My Lords, I beg to move.
On Question, amendment agreed to.
[Amendment No. 7 not moved.]
Clause 3 [Exclusion of, and modifications for, certain classes of person]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 8:
Page 3, line 4, leave out subsection (3).
The Deputy Speaker: My Lords, before continuing, I should tell your Lordships that if this amendment is accepted, I shall be unable to call Amendment No. 9.
Baroness Miller of Hendon: My Lords, I have spoken to this amendment with Amendment No. 1, which was agreed to.
On Question, amendment agreed to.
[Amendment No. 9 not moved.]
Clause 4 [Power to add to the persons to whom Section 3 applies]:
The Deputy Speaker: My Lords, before calling Amendment No. 10 I should tell your Lordships that if it is agreed, I shall be unable to call Amendment No. 11.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 10:
Page 3, line 18, leave out subsection (2).
The noble Baroness said: My Lords, I have already spoken to this amendment with Amendment No. 1.
On Question, amendment agreed to.
[Amendments Nos. 11 and 12 not moved.]
6.30 p.m.
Clause 8 [The Low Pay Commission]:
Lord Razzall Lord Razzall moved Amendment No. 13:
Page 7, line 3, leave out ("may at any time appoint a") and insert ("shall, not more than 12 months after this Act comes into force, appoint a permanent, statutory").
The noble Lord said: My Lords, as I indicated earlier, the Liberal Democrats support the Government's major objective in the Bill. We have only two reservations. The first was enshrined in the vote on Amendment No. 1. We believe that the Government should leave themselves the flexibility to vary the national minimum wage, in particular to introduce regional variations if changing circumstances prove that to be necessary.
I listened carefully to what the Minister said in Committee. However, as regards our second and more fundamental difference with the Government, we believe that they should go further and establish permanent status for the Low Pay Commission. In doing so, the somewhat unseemly ping-pong between the press, the Government and their spin doctors over the establishment of the minimum wage, and whether the Treasury or the DTI had won, would be taken out of politics. We believe that the minimum wage is an essential reform and we support the Government. However, we believe that during the next round of discussions on uprating the minimum wage the Government should have in the Bill the serious and significant status of the commission. As regards Amendment No. 14, we believe that, the Low Pay Commission having been established, the Government should require it to produce a regular report updating its data and informing debate and opinion.
The experience of other countries—the United States is a good example of the point I make—is that, where steps have not been taken to establish a permanent structure for upgrading and examining the rate, there is an unseemly political row about what the revised figure should be. The experience of the first round has not been happy for the Government. I urge your Lordships to accept the amendments in order to ensure that in future that unseemly row does not occur. I beg to move.
Lord Fraser of Carmyllie: My Lords, we have considerable sympathy for the amendment and would like to discover the Government's present proposal. Press reports indicate a conflict of view as to whether the Low Pay Commission should be permanent or have only a limited life. At the previous stage I was unsuccessful in ascertaining whether the Government's

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intention is that it should be permanent. It would be helpful to understand their intentions and I should be grateful if the Minister could place them on record.
Lord Clinton-Davis: My Lords, I tried earlier, perhaps unsuccessfully, to do precisely that. If the argument needs reiteration, so be it. The Opposition and the Liberal Democrats have argued in another place and in this House that the Low Pay Commission should be permanent. Therefore, it is reasonable to ask the question posed by the noble and learned Lord, Lord Fraser of Carmyllie.
The Liberal Democrats, notwithstanding the aberration earlier today, have shown strong support for the Government's objective as regards the minimum wage. We see the commission having a continuing and important role to play and I will go into that in a little more detail in a moment. That will be important during the running-in period of the minimum wage and possibly in the longer term, too.
We intend that the commission should undertake two tasks. The first is to review the position of 21 year-olds. The rate for them is to be set in April 1999 at £3 an hour. We want the commission to review that in 1999 following the transitional rate being imposed at that level and then to provide a further report on whether, in the light of experience, it wishes to reconfirm its advice that 21 year-olds can safely be covered by the main adult rate. That is an important and useful role and we shall await with interest its conclusions formed in the light of experience.
As I said earlier, we are also asking the commission to continue its work on monitoring and evaluating the introduction and impact of the national minimum wage. That is an important role for the commission, too, because this is the first time this country will have had a national minimum wage and we need to have a reliable assessment of its effects.
However, I do not believe that the amendment, which would require the Government to appoint a permanent body, is necessary. The commission can be required as appropriate to add to its expertise in the whole developing area. The Bill already allows the Government to call on the commission in this direction under Clause 8(9). I hope therefore that the noble Lord will examine further what I have said in that context. We provide the necessary way ahead to ensure that the commission can contribute as necessary and I hope that he will not press the amendment to a Division.
Amendment No. 14 prescribes particular issues which the commission must cover in its annual report. However, it does not limit the commission to looking only at those issues. We say that the amendment is somewhat overly prescriptive and too open ended. I would not disagree with the noble Lord in the way in which he wishes an examination and an assessment to be made in some of the important areas which need to be reviewed—for example, different sizes of business, different areas, gender, race and so on. However, I do not believe that we need to spell it out on the face of the Bill in the way that the noble Lord seeks to do. What
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the LPC is already required to do is to look at economic and competitiveness factors in making its recommendations.
Under Clause 7(5)(b) the Government may in fact establish other factors which the commission should consider. As I said, we want the commission to continue monitoring and researching the impact of the minimum wage; indeed, that is a perfectly reasonable thing to do. It is also a sensible way in which we can look forward to a reassessment of the position. I believe that the noble Lord also spoke to Amendment No. 63—
Lord Razzall: My Lords, I should point out to the Minister that it was the original intention that Amendment No. 63 should be included in the grouping, but that is no longer the case.
Lord Clinton-Davis: My Lords, I apologise and thank the noble Lord for that information. I hope, therefore, that the noble Lord will feel that our approach to the important issue that he raised is positive and that he will not find it necessary to test the opinion of the House. However, if he does so decide, that is a matter for him.
Lord Razzall: My Lords, I thank the Minister for that response. The relevant clause on which the issue turns is Clause 8(9) to which the noble Lord referred. That subsection says:
"The Secretary of State may at any time appoint a body … to discharge the functions conferred or imposed on the Low Pay Commission under this Act".
As the Bill has crawled its way through the other place and also through the various stages in this Chamber, I believe I detect that the Government are getting ever closer to actually confirming that they do intend to appoint such a body. Indeed, if between now and Third Reading the Government could go just that extra mile or, indeed, that extra centimetre and so confirm, it would, as the Minister said, completely take the heat if not the sails—and that may be a mixed, strangulated metaphor—out of our amendment. I certainly do not wish to press the two amendments at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 14 not moved.]
6.45 p.m.
Clause 9 [Duty of employers to keep records]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 15:
Page 7, line 30, at end insert—
("(1A) Records kept by an employer in relation to any worker for income tax or national insurance purposes shall be deemed to satisfy in relation to such worker any requirement as to records of remuneration paid as may be provided for in accordance with subsection (1)(a) above, save for details of the number of hours worked and any benefits in kind or other items having a monetary value which in accordance with the directions of the Low Pay Commission are to be taken into account in calculating the worker's gross pay, of which employers shall keep an adequate separate record.
(1B) In subsection (1A) above, "income tax or national insurance purposes" means the purposes of compliance with—

(a) section 15 of the Taxes Management Act 1970,

(b) section 203(2)(b) of the Income and Corporation Taxes Act 1988,

(c) paragraph 8 of Schedule 1 to the Social Security Contributions and Benefits Act 1992,

(d) any regulations for the time being in force made under any of the above Acts, or

(e) any statutory re-enactment or modification of any of the above Acts or regulations.").

The noble Baroness said: My Lords, in moving the above amendment, I shall speak also to Amendment No. 16. When I moved the same two amendments in Committee, I truly believed that I was proposing a constructive improvement to the Bill. The amendments would not affect in the slightest degree what the Government claim are the objects of the exercise. The amendments would not reduce in the slightest degree the right that the Government propose that employees should enjoy, nor would they reduce the obligations on an employer to maintain accessible records that would provide employees with all the information that they need to check that they are receiving the minimum wage.
What I proposed in Committee—and again propose now—is the blindingly obvious suggestion that the various records that the employer is already obliged to maintain for the purposes of PAYE and national insurance, coupled in due course with the records required to comply with the European Community's Working Time Directive, should also be sufficient for the purposes of this Act.
What a helpful suggestion that was! It would reduce the amount of paperwork required to be done by very small firms without the ability to handle more than a minimal amount of clerical work and bookkeeping. The records would be in a form which would be easily understood, especially after the Secretary of State made regulations under Clause 12 about the information to be included in their pay packets. The accuracy of the records themselves would be guaranteed under the sanction of severe financial and criminal penalties provided by the taxation and social security legislation—sanctions far more severe than those proposed under this Bill. Using the PAYE, the national insurance and the working time records would enable those responsible for enforcement to check compliance by referring to documents in a form with which they would already be familiar. How prophetical that last point has proved to be, as your Lordships will see shortly.
So what happened to my totally non-political reasonable, helpful and entirely practical suggestion? The noble and learned Lord the Solicitor-General shot it down in flames in a speech that was half as long again as the one that I had made. The noble and learned Lord conceded my point about what he called,
"an entirely laudable aim … to avoid undesirable duplication in the records kept by the employer".—[Official Report, 15/6/98; col. 1382.]
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He said that that was an aim that the Government unquestionably shared. So why do the Government not accept the amendment? The Minister said that it was because they had made a commitment to consult on the draft regulations before bringing them to the House.
I am really trying to avoid making political points in this very non-partisan amendment. So I will not say that I wish I did not have this nagging feeling that the Government will simply go through the motions of consulting, and then use their rather large majority in the other place to do exactly what they intended to do in the first place. I see the noble and learned Lord is looking surprised; but I am not a bit surprised. However, I shall be interested to know what better and improved types and form and format of records the Secretary of State has in mind. Surely she must already have some idea.
On the last occasion that these amendments were debated at col. 1385 of Hansard, the Minister said:
"I cannot tell the Committee at this point exactly what type of records we shall be requiring".
In the month that has gone by since that speech was made, can the Minister say whether the Secretary of State has even begun to formulate the most sketchy of ideas? If so, perhaps the House could now be informed as to what they are. I should also be interested to know how the Secretary of State believes that it will be helpful to employers and employees—and to those who are responsible for enforcement—to require a different form of records or the same form of records written on a second piece of paper.
In any event, despite what I thought was the reasonableness of my suggestion, the Government rejected my amendment; as, indeed, they have done with every one of the 108 amendments that bore my name up until today. But luckily I am made of sufficiently stern stuff to take such rebuffs with total equanimity. Therefore, I decided to let the Government stew in their own juice over the matter. If the Secretary of State was bent on empire-building, with more inspectors and enforcement officers, then perhaps the silver cloud was that it could provide employment for the many people who will be forced out of their present jobs, or who will fail to get jobs, as a result of the adverse effects of this misconceived piece of legislation.
However, something then happened: the report of the Low Pay Commission was published. What did it recommend? This is where the prophecy to which I referred earlier comes in. The commission enthusiastically endorsed the idea of the Contributions Agency, soon to be combined with the Inland Revenue, to be responsible for overseeing compliance and to be responsible for enforcement. It spoke in glowing terms of the expertise of the agency in such matters.
I assume that the noble and learned Lord the Solicitor-General was as much in the dark as I was on 15th June about what the commission would recommend. He did not know—indeed, he could not have known—that my proposal would fit in precisely with the recommendation about the enforcement authority. If he had known that, he would undoubtedly have agreed that it would be ludicrous to have the

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officials of one department using a different set and form of records to perform its duties under this Act from those which it is accustomed to using.
Can the Minister tell us whether the Government are going to accept the commission's recommendation on the enforcement agency? If not, perhaps he can tell us why not. However, if the answer is yes, what is the continued objection to this amendment? I look forward with much pleasure to hearing the Minister telling us just for once that he will say "yes" instead of "no". I beg to move.
The Solicitor-General (Lord Falconer of Thoroton): My Lords, as the noble Baroness has accurately pointed out, this matter was discussed in some depth in Committee. I made the mistake of believing that in the course of the Committee stage, I had explained the reasons for not accepting Amendments Nos. 15 and 16. At the time, I accepted that they were proposed in good faith in an attempt to try to improve and assist the enforcement of the Bill. There is much common ground between us on this matter but there are real practical problems in what the noble Baroness suggests.
I think we are all agreed on the importance of record-keeping to the success of the Bill. Without adequate records, it will not be possible to enforce the law. The worker needs to be able to see what he is being paid and the employer needs to have records in order to defend himself in case he is accused of underpaying. It is therefore in the interests of all that adequate records are available. In her Amendment No. 15, the noble Baroness proposes to limit the Secretary of State's flexibility to decide the form and content of the records by tying them to the kinds of records already required for income tax or national insurance purposes. That is driven by a perfectly understandable desire to prevent unnecessary duplication. I referred to that in the speech I made in Committee.
This Government understand and agree with the motive of avoiding duplication. We have no wish to impose unnecessary burdens on business. We have said that clearly on a number of occasions, in particular in the Regulatory Appraisal where we pointed out that most wage details will already be kept for tax purposes, which is one of the points the noble Baroness has made. I remind the House once again of what was stated in that document,
"It is in employers' own interests to know how much they are paying their staff. Therefore, it is reasonable to expect that employers will already have records for the calculation of total pay that will be sufficient to calculate pay as it relates to the NMW. They will already have such records available for inspection by the Inland Revenue and Contributions Agency".
That is very much in line with what the noble Baroness said.
However, the Regulatory Appraisal went on to note that there will be differences in the kinds of records to be kept, not least as regards the number of hours worked and any non-monetary payments which may be allowed to count towards the hourly minimum wage rate.
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Amendment No. 15 acknowledges that fact which is why it expressly allows for different requirements to be added.
It is clear from what I have said that in relation to the principle, the need for good records and the desire not to place unnecessary burdens on business, the noble Baroness and I are in agreement. However, the Government do not believe there is any necessity to make any changes to the face of the Bill. The issues raised in the amendment go to the detail of which records should be kept, and, in the Government's view, are best dealt with in the regulations. As this amendment accepts, income tax contributions do not by themselves provide adequate records. Clause 9 as at present drafted is left wide precisely because we want to identify how best to fit in with existing legislative requirements in this area.
As the House knows, the Government are committed to consulting on the regulations in draft form before bringing them to the House. There will therefore be an opportunity for businesses and individuals to make representations on the record-keeping regulations. I thank the noble Baroness again for drawing to my attention, in the retabled amendment, the various related statutes covering record-keeping for tax and national insurance purposes. That is of great assistance in determining how best to move forward in relation to the regulations.
While the noble Baroness may be right that tax and national insurance records will suffice in some cases, we cannot be sure of that. I think it would be unwise for the Government to tie their hands in the way proposed by the amendment ahead of consultation. I think it is right that we do not jump to conclusions in primary legislation. However, as I have indicated, I recognise a number of the valuable points which the noble Baroness has made. I hope therefore that I have on this occasion explained sufficiently clearly—unlike on the previous occasion—why we do not think that income tax and national insurance provide the way forward. There is something to build on there but whether it is the appropriate course will depend to some extent on the regulations.
I shall now discuss Amendment No. 16. I have absolutely no doubt that it is proposed in a desire to help rather than to hinder the Bill. Amendment No. 16 would again limit on the face of the Bill the Secretary of State's flexibility to decide the form and manner of records to be kept in respect of hours worked for minimum wage purposes, this time by tying them to records of hours worked which may be kept for the purposes of showing compliance with the working time directive.
I hope that noble Lords will welcome both these initiatives—that is, the minimum wage and the working time directive—as a sign of this Government's commitment to improving the lot of workers who are obliged to work for too long and/or for too little. These are basic matters of social justice and fairness. It is much to the credit of this Government that we are proceeding apace with making them part of domestic legislation. I do not believe that it makes sense to prescribe on the face of the Bill what kind of records

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should or should not be required to be kept. That would in my view be too limiting an approach and too premature.
As I have already made clear, we intend to consult on draft regulations. That consultation will inevitably involve identifying the various existing record-keeping requirements. As regards records of working time, I should make it clear—as I thought I had done on the previous occasion—that the draft working time regulations, on which we have just completed a further consultation, contain a general record-keeping requirement on all employers. Employers simply need to show that the time limit of 48 hours is being complied with. They are not necessarily obliged to keep records of working time as a means of proof. For example, it might be sufficient to show simply a list of workers who regularly work no more than the 48 hours. Therefore there is no general requirement on all employers to keep records of hours worked. On this ground alone the amendment could be unsuitable because, as is clear from what I have just said, one could keep records for the working time directive but that would not indicate how many hours individuals had worked. I should have thought that hits amidships, as it were, the basic purpose of this amendment.
There is a more specific record-keeping requirement in the draft working time regulations which requires employers to keep records of hours worked, but this applies only to those employers with employees who have opted to work longer than the 48 hour limit. Therefore it would not cover everyone who is covered by the national minimum wage. Again that does not help to meet the requirements of the national minimum wage. I therefore have considerable doubts as to the suitability of this amendment in the context of the minimum wage. However, I take the general point, at which perhaps the amendments are aimed; namely, that the minimum wage records will almost certainly need to cover hours worked—however this may be defined—and there may be scope for avoiding duplication with other possibly similar records.
We shall certainly look at these issues in the context of our forthcoming consultation on the minimum wage regulations. Your Lordships will have an opportunity to debate the matter further when we lay those draft regulations before the House. I argue that the matters raised by the amendment are detailed issues on which we should not second guess the views of those who will be affected, principally business, but also workers. We shall canvass their views and then make any changes accordingly. I suggest this indicates that we should not amend the Bill but rather should leave such matters to the consultation and the regulations. Therefore I respectfully suggest to the noble Baroness—despite the fact that we agree on many of the basic principles relating to this amendment—that she withdraw Amendment No. 15 and not move Amendment No. 16.
Baroness Miller of Hendon: My Lords, I thank the Minister for that detailed and helpful reply. I certainly do not wish to pursue matters much further. I am quite sure he is right when he says that there will be much discussion on the proposed regulations. However, given
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that the Government have already decided that benefits in kind will be excluded, I am not sure how much detail will be necessary in the regulations if the noble and learned Lord is suggesting that there may be some way of working out hours that are worked. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7 p.m.
[Amendment No. 16 not moved.]
Clause 10 [Worker's right of access to records]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 17:
Page 7, line 31, leave out subsection (1) and insert—
("(1) Subject to the provisions of this section, a worker shall be entitled, on written request, to be supplied by his employer with a copy of any relevant records within twenty-eight days of receipt by the employer of that request.").
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 18 to 23, 25 and 26, and 27 and 28, which are all consequential on the passing of Amendment No. 17.
We spent no fewer than 45 minutes on this amendment in Committee. I then withdrew it to give further thought to the remarks of the noble and learned Lord the Solicitor-General in opposing it. I told him then that I was not satisfied with his answer and, after further and most anxious reflection, I feel that I have no alternative but to bring it back for your Lordships' further consideration.
It is no exaggeration to say that this clause raises an issue of fundamental constitutional importance tucked away in the administrative details that it contains. Clause 10 deals with the employee's right of access to records of the pay he has received, hours worked and any other factors relevant to the question of whether he has received the full national minimum wage to which he is entitled. Let me say at once and unequivocally that we fully support the right of the employee to receive that information. Initially he will receive it from the detailed information that the employer will be obliged to provide in compliance with the regulations that will be made by the Secretary of State under Clause 12. More than that, we support the employee's right, if necessary, to verify that information from the employer's own records.
So where is the difference between us and the Government? It lies in the method by which it is proposed that the employee should obtain the employer's records. We believe that for some reason the Government have taken a gigantic hammer to crack a small and very commonplace nut.
The regime that the Government seek to put in place is one which we believe is totally and unnecessarily heavy-handed. So far as I can ascertain, it is entirely without precedent. But worse than that, in a country which revels in the fact that it has no written constitution, we believe that this provision offends against the safeguards and protection that has been accorded by the common law for centuries.
Clause 10(5) provides that the employee may serve the employer with what is termed a "production notice", requesting the production of relevant records. That in itself is not objectionable. However, the consequences provided for by the Bill are.
In subsection (8) the employee then has the right, after notice, to enter the employer's premises or some other place to inspect the records. It may be asked: what is wrong with that? It may very well be that an employer may not want to be confronted by, or to meet, his employee—or more likely, his ex-employee, with whom he is presumably in dispute.
It seemed from his intervention during my remarks in Committee that the noble and learned Lord was unaware of that extreme power. But the matter does not rest there. Subsection (4) gives the worker the right to be accompanied,
"by such other person as the worker may think fit".
Whatever the reason is for that provision, it clearly opens the door to the possible intimidation of the employer. I grant that that could not have been the Government's intention. However, it would be the height of naïvety to suggest that it may never happen. I wonder whether the Government want to take the moral responsibility for that, as frequently as it may occur, especially as the presence of the "minder" to accompany the employee is no more necessary than the need for a worker to go onto an employer's premises or force the employer to nominate some other meeting place.
Why does the employee have to go anywhere to inspect the records? Why does the Bill not provide, as does the amendment, that the employee shall be entitled to receive a copy of the relevant documents, sent to any place or any person on his behalf that the employee nominates?
As I pointed out in Committee, if I require to see records relating to me in someone's computer, if I require to see my medical records, or if I desire to see the records of shareholders held on the register of a limited company, I do not have the right to go onto the premises of the person holding the records. I have to send in a written request and, within a prescribed time, the record holder is obliged to send me a full copy. If I am involved in civil litigation and I require to see documents held by the other party, I first need a court order, which is usually granted automatically as part of a set pre-trial procedure. After that, inspection takes place in the office of either of the solicitors to the parties. There are circumstances when even in civil litigation a party can obtain a peremptory court order to go onto another person's premises. It is known as an Anton Piller order, as I mentioned in Committee. It is hedged around with very strict conditions, including the presence of an independent solicitor to protect the interests of the occupier of the premises.
There is absolutely no need for an employee to have the right personally, with or without the assistance of someone else, to go onto the employer's premises. If the other person is required to assist the employee to read and understand the records, that can be done at the
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employee's leisure at a time and place of the employee's choice so long as what he is looking at are copies of the records. Such copies are supplied in vast quantities on frequent occasions in the course of civil litigation—which disputes and claims under the Bill will essentially be. There is absolutely no justification or need for the employee, on the strength of what can properly be called a home-made search warrant, to enter the premises of the employer to confront him, possibly accompanied by a total stranger. What if the employer is a woman and the employee and the accompanying person are both men? An Anton Piller order requires one to be present at the time the order is executed. Where is the similar protection in subsection (4)(b)? None of those problems arises if the normal procedure for supplying copies of records is followed.
I wish to examine the arguments advanced by the Government against the amendment that I moved in Committee. It is necessary to do so phrase by phrase. The Solicitor-General said:
"I think we would … all agree that it would be quite inappropriate for the employee to have a right to go into the employer's premises and look around in relation to particular records".
But that is exactly what subsection (8) provides. The place at which the relevant records are produced must be either, as stated in sub-paragraph (a),
"the worker's place of work,
or, to paraphrase sub-paragraphs (b) and (c), another reasonable place or one to which the parties agree.
So if the employer cannot provide some other place and the parties cannot agree on one, then it has to be the employer's premises. The noble and learned Lord the Solicitor-General shakes his head in disagreement. Undoubtedly, he will reply in detail as to why that is. But that is how the provision appears in common English. I cannot see any reason why the noble and learned Lord shakes his head. The problem would not arise if the records could be supplied as copies or photocopies.
The Minister complained that the only remedy open to an employee is to take the matter to an employment tribunal, which can inflict a monetary penalty under Clause 11. How is that relevant to the matter that we were discussing in Clause 10? The penalty for refusing access to records has no relevance to the way in which the records should be provided.
The Minister argued that the presence of a third party was necessary, who,
"might help explain to him what the records mean".
I have already pointed out that the employer's adviser can do that just as easily by going through the copy records at a citizens advice bureau or trade union office or even the employee's own home, and can take as long as he likes to do so.
The Minister justified the presence of someone accompanying the employee by saying:
"I believe this is an important entitlement which will encourage workers to exercise their rights and discourage some employers who may be tempted to use unfair tactics of dissuasion".
"Discourage some employers"? To me, that sounds like intimidation. It sounds as though the Government see the person accompanying the employee as more of a

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bodyguard than an accountancy adviser; otherwise, why would bringing him in discourage the employer from behaving in any particular way, as the noble and learned Lord the Solicitor-General said to me in Committee?
The problem envisaged by the Minister will not arise if the process is handled at long distance by the employee demanding and receiving copy documents as I suggest. The Bill does not even provide for the length of any proposed personal inspection. Can the employee conduct a gigantic filibuster and keep his employer hanging around for hours?
After describing my approach as fallacious, the noble and learned Lord the Solicitor-General said:
"A production notice can be given. That requires the employer to do certain things including providing certain documents".
I believe it is the Minister's argument that is fallacious. The Bill does not require the employer to provide documents; that is what I say should happen. Clause 10(1)(a) of the Bill says that he should produce the documents and allow the employee to inspect and copy them himself. At column 1401 the noble and learned Lord the Solicitor-General said:
"I believe that it is essential to the enforcement provisions for a worker to have the right to inspect records".
We have no argument on that point. But he went on to say:
"Of course, in many cases, that right will be met by the employer providing the worker with a copy of the records as they relate to him. I imagine that will in fact be the normal way to proceed".
I thank the Minister for that remark because that is precisely the procedure which the amendment calls for and which the Government have been resisting, the procedure that the noble and learned Lord the Solicitor-General says would be the normal one. However, two paragraphs later, contradicting himself in a U-turn that must be a record even for the Labour Party, he said:
"the replacement of the right of access with a right to a copy of records would, in my view, unacceptably weaken the enforcement provisions of the Bill".
Why and how? On the contrary, it would strengthen them.
First, the Bill provides only for the employee to make copies of the records himself. How will he do that? Will he cart his own photocopier or computer printer into the employer's premises, or will he rely on the employer to loan him his own equipment and stationery and let him use his electricity supply simply to expedite his departure from his shop or office? Suppose the employer does not have any such equipment? Many small corner shops, hairdressers, flower shops, and so on, do not. The worker will then have to copy the records by hand, with all the opportunities that that presents for clerical errors. For example, an employee is paid £220, but he writes down "£202". Even an employer without a photocopier will be able to find somewhere from which to borrow one or go to a local copy shop. He is certainly not obliged to allow the worker to take the records away, and he would be most unwise to do so.
What reason did the noble and learned Lord the Solicitor-General give for his abrupt change of mind?
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He trotted out the mythical unscrupulous employer yet again. He said:
"it is a regrettable fact that some employers may fail to provide the right records or may wish to conceal relevant records".
Under subsection (9) the employer has 14 days to produce these records, plenty of time for the employer, if he so wished, to remove or conceal anything he wants to. Even the search warrant that the worker is allowed to issue under subsection (5) does not give the worker the right to ransack the employer's premises to look for the documents. The Minister himself admitted that that would be quite inappropriate. Is it suggested that the mythical unscrupulous employer will doctor his records, risking a lengthy prison sentence for forgery? There is absolutely no advantage, from the enforcement point of view, for there to be physical inspection, but the amendment prevents harassment or embarrassment of the employer by having the employee and his minder intruding on his premises.
There we have it. We both agree that an employee should have the right to check the employer's records and to supplement the data that the employer will have to supply under Section 12. There is no argument between us. The only difference is the question of how and where. "How" should be by the method which is normal in any similar situation of a civil dispute: by the provision of copy documents, which, as the noble and learned Lord the Solicitor-General himself admitted, he imagined,
"will … be the normal way to proceed".
The answer to the question of where the records should be inspected is that it should be at whatever address the employee asked for the records to be posted to.
I beg the pardon of the noble and learned Lord the Solicitor-General if he finds it embarrassing that I keep quoting from the things that he quoted to me earlier. I read them with the most enormous care. The noble and learned Lord said, at the foot of column 1402:
"the amendments are, with the greatest respect, based on a fundamental misunderstanding of the position, which is that it gave the employee the right to walk into the premises".—[Official Report, 15/6/98; cols. 1400–02.]
Perhaps I may say, with even greater respect, that it was the Minister who was labouring under a fundamental misunderstanding. Now that he has had a whole month in which to re-read subsection (8), I trust that he will agree to accept the amendment, which does nothing to diminish the right that we both agree the employee should have to see records but does not infringe the employer's fundamental constitutional right not to have his premises invaded against his will by his employee and a total stranger.
Amendment No. 28 to Clause 11 is consequential to the main amendment. As we propose that the employee shall receive the records by means of copy documents rather than by direct access to the employer's premises, it naturally follows that an offence of failing to supply a copy of the records has to be substituted for the offence of failing to give physical access to them. I beg to move.
7.15 p.m.
Viscount Thurso: My Lords, I rise to speak to Amendment No. 24 in this grouping, which stands in my name and that of my noble friends. When I rose to speak to a similar amendment at Committee stage, it was following the same argument that the noble Baroness has just put forward. I said then that I did not feel that I could agree with her and that, as an employer, I did not feel that there was a particular problem. Having listened to the argument again, I have exactly the same feeling. Therefore, with regard to those amendments, we shall support the Government and thus normal service is now resumed.
The effect of my amendment as it stands would be to add to subsection (9) of Clause 10 a third option: that the notice could be produced,
"during the paid contractual working hours of the employee".
I must again apologise, as I did at Committee stage. I have spotted that there is a drafting error and that the amendment does not achieve what I wish it to achieve. The amendment should be drafted so as to place in subsection (9)(a) after "notice" the words that are printed on the Marshalled List. It would thus read:
"The relevant records must be produced—

(a) before the end of the period of fourteen days following the date of receipt of the production notice and during the paid contractual working hours of the employee; or

(b) at such later time".

This has a quite different effect from the amendment as currently drafted. As I gave notice of that mistake to the noble and learned Lord, I hope that he will allow me to speak to the amendment as it should have been drafted rather than as it is drafted.
The amendment seeks to put a further obligation on the employer in respect of the production notice. It has effect only for employees who are working at night, in that the vast majority of employees work during the day and consequently the obligation for the employer to produce the notice at the time the employee is working will cause no hardship to the employer and will have no effect on the employee. However, for those who work night shifts, such as night porters in the catering industry and night security guards, it means that the employee can oblige the employer to make the production of the records during his or her contracted hours. It can be argued that that places a further and more difficult burden on the employer. I would rather argue the opposite case: that not to do so is to place an unreasonable burden on the employee.
At Committee stage the noble and learned Lord said that he was sympathetic to the principles underlying the amendment. He went on to say, however:
"as an employer, the noble Viscount might be a little irritated if a person in his personnel office had to wait until three o'clock in the morning just to give someone like a night porter his records".— [Official Report, 15/6/98; col. 1407.]
I took that point. However, most shift workers begin at 10 or 11 at night and end at six or seven in the morning. Those are times at which—certainly in the hotel industry and I suspect in most other industries—there is someone on duty of a sufficient stature, be it a supervisor or a manager, who can be briefed by the personnel
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department and would be able to take the employee through the records. I do not believe therefore that it places too much of a burden on the employer.
Why then is it a burden on the employee to come in outside his contractual hours? There are two main reasons. The first is a simple one. If the employee works in the country, lives 40 minutes away and comes in using his own transport, then that employee is obliged to come to work at his own cost, using his own petrol or whatever it might be, at a time when he would not normally be at work. The exercise of his right therefore involves a cost and, as we know, cost for people who are on a minimum wage means a barrier.
The second reason is that it obliges the employee to come in and go through the records in his free time—either during those precious hours of daylight when he wants to sleep or, indeed, on a day off. It is a little hard and somewhat unreasonable to insist that an employee should come in to see the employer while the employee is on a well-earned break or a day off.
In effect, not allowing the employee to attend in his contracted hours discriminates between the day shift worker and the night shift worker. It gives the day shift worker advantages which the night worker does not have and gives the night worker costs and difficulties which the day worker does not have.
As a small final point, I mentioned transport. We have just had a White Paper published on transport. Anything that cuts down on the use of transport, particularly private transport, would be a good thing.
My argument therefore is straightforward and very much as I put it at Committee stage, though perhaps I take it a little further. It really concerns the balance of unreasonableness which I feel should be placed on the employer rather than on the employee. Throughout this legislation we have been talking about the bad guys because the good employers will always get these things right anyway. I suggest that my argument demonstrates that the balance of unreasonableness should be on the employer and in this case we should be supporting the employee. I hope that the Government will be sympathetic to the suggestion. I cannot move the amendment because it is defective but perhaps we can come together with something at a later stage which the Government will feel they can accept.
Viscount Bridgeman: My Lords, perhaps I may refer to my noble friend's main group of amendments. As was said in Committee, the introduction of the companion or minder—whatever one calls him—on the employer's premises or at some place agreed between the employer and the employee, differs from practice elsewhere and is liable to abuse.
With the greatest respect, I suggest that the Minister sees this as an ideal situation and that the provisions as presently drafted do not provide for unreasonable behaviour by either party. There is also the question of confidentiality to consider and we may get into the

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situation that the companion says, "I want to see this and that", telling the employee what is his due to be shown. The Bill needs further safeguards.
Lord Falconer of Thoroton: My Lords, perhaps I may deal first with the amendments of the noble Baroness, Lady Miller, in relation to Clause 10. With great respect to the noble Baroness, she again missed the point in relation to what is the protection for employers in this matter.
Everybody agrees that the national minimum wage will not work unless employees have the right to look at the source material; namely, what the material shows they have been paid. That right must be meaningful and provide adequate protection both to employer and employee. We believe that the provisions of the Bill as presently drafted do just that.
There are three safeguards for the employer. First, the right to look at the material can arise only if there are reasonable grounds for believing that the employee is not receiving the minimum wage. Secondly, there is no question—as the noble Baroness keeps upsetting your Lordships by saying—of the employee simply marching into the employer's premises and demanding to see records. He or she must give notice specifying a period at which he or she wishes to inspect the records.
Thirdly, the employer can determine where the inspection takes place. Subsection (8) says,
"The place at which the relevant records are produced must be—(a) the worker's place of work; or
(b) any other place at which it is reasonable, in all the circumstances, for the worker to attend to inspect the relevant records; or
(c) such other place as may be agreed between the worker and the employer".
Like all great advocates when confronted with the major difficulty in her argument—namely, subsection (8)(b)—the noble Baroness simply read it and said nothing about it. If, as the noble Viscount, Lord Bridgeman, fears, employers are worried about confidentiality and if, as the noble Baroness, Lady Miller, says, employers might be worried about being intimidated by the person who is brought along, then they would be perfectly reasonable in saying, "You cannot inspect at the employer's premises; you have to go somewhere else". They might go to the employee's home, the offices of a citizen's advice bureau if that is sensible, or even a solicitor's office. All of the problems which have been identified can be dealt with under subsection (8).
Clause 10—which in effect would be rewritten as a result of these amendments—is, as I indicated, drafted as it is for very good reasons; that is, reasons to do with fairness and reasonableness. These amendments would either make the clause less equitable or in some cases simply make it less workable.
The Government fully accept that enforcement should not be overburdensome. That is why, in subsections (2) and (3) as I indicated, the Bill makes it clear that the right of access is already limited; for example, the worker must have reasonable grounds for believing that he is or has been paid less than the minimum. In
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addition, the right of access may be exercised only for the purpose of establishing whether the worker is being or has been paid at least the minimum. That goes a considerable way to meeting the problem posed by the noble Viscount, Lord Bridgeman. Again, as I indicated, the worker must produce a written notice.
Clause 10 as it stands also allows a degree of flexibility; for example in agreeing a different period—longer than the specified 14 days—for the production of records, under subsection (9)(b).
Finally, the clause provides for workers actually to inspect records and to be accompanied if they wish. I believe that is an important entitlement which will encourage workers to exercise their rights and discourage some employers who may be tempted to use unfair tactics of dissuasion.
I did not mean that in any intimidatory way when I said it in Committee and was extremely disappointed to hear the noble Baroness suggest that I did. What I meant by that was that there will be certain circumstances where an employer—there will not be many of them, but there will be some unscrupulous employers who wish to make it as difficult as possible—will simply provide a circumstance which is intimidating to an employee, perhaps a homeworker or someone not skilled in looking at records. In those circumstances it is perfectly appropriate that that person should be accompanied by somebody to help him. if the employer is concerned that he will be intimidated, he can deal with it by identifying somewhere where he thinks it reasonable to have the inspection.
More broadly, it is worth emphasising, that the overall purpose of this and other enforcement mechanisms is to encourage self-compliance. It is far preferable, if at all possible, to encourage employers to comply voluntarily than to have to provide for a huge bureaucracy to do so. Furthermore, by allowing workers to inspect records it should be possible to prevent cases of simple confusion or misunderstanding. That in itself should help to keep cases out of the tribunals and the courts.
The amendments would significantly weaken the position of the worker for no particular reason. In addressing them, I shall aim to focus, as in the earlier debate, on three main issues: the removal, by Amendment No. 17 and related amendments, of the worker's right to inspect and examine his records; the removal of the right to be accompanied; and the lengthening of the time in which records must be produced to 28 days.
Taking each of those points in turn, I believe it is essential to the enforcement provisions for a worker to have the right to inspect records. Of course, in many cases that right will be met by the employer providing the worker with a copy of the records as they relate to him. I imagine that that will be the normal way to proceed because in most cases employers and employees will behave well. But in setting out an enforcement procedure one has always to legislate for those cases where the employer or the employee is not behaving well. That is why it is always necessary, as in all civil litigation, for the originals to be inspectable.

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I do not believe that the Bill allows this right to be abused. I doubt whether there will be long lines of employees queuing to inspect their relevant records in person. Subsection (2) already makes clear that the worker must have reasonable grounds to exercise the right. Therefore, the replacement of the right of access with a right to a copy of records would unacceptably weaken the enforcement provisions of the Bill.
This batch of amendments, which hang on Amendment No. 17, would also remove the worker's right to be accompanied when examining the records. As I mentioned, I believe that this right is essential to prevent some employers fobbing off their workers or pulling the wool over their eyes. I do not believe that there will be many such cases, but the option to be accompanied provides a reasonable means of avoiding that.
There is also a pragmatic reason for this provision. Some of the calculations of remuneration for minimum wage purposes may be not at all straightforward and some workers may feel more confident if they can call on a colleague with particular accounting or legal expertise. Again, some workers may not have a complete command of the language to enable them to understand financial or legal terms. The outcome of this provision should assist understanding the position and, to the extent that there may have been an innocent misunderstanding, should encourage early resolution of the problem.
Finally, the amendments would double the amount of time allowed to an employer to produce the records from 14 to 28 days. There seems to be no reason for this proposal. It seems to me that any reasonable employer would be able to produce records relating to how much he pays his staff within a fortnight. Subsection (9) of the clause in any event allows the worker and employer to agree between them an extension of the deadline if that is appropriate. So we have already built in more than sufficient flexibility for employers and employees.
That leads me to Amendment No. 23; for not all the amendments act in the interest of the employer. This amendment deletes subsection (9). It would therefore actually remove the right of the worker and employer to reach agreement on a longer timescale. I am surprised to see this amendment survive, despite apparently working against the interests of the employer, and no argument has been advanced in support of it.
As I indicated, we have designed the clause to be effective in a balanced way, not in order to over-burden or punish employers. It is in everyone's interests, workers and employers, for enforcement to be fair, and in particular for enforcement to be effective.
Perhaps I may come back to what I think is the noble Baroness's underlying fear that the clause allows employees to march into employers' premises and look at records. It does not. That is the misconception that underlay the whole of the noble Baroness's submissions. I would earnestly ask her to think again
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on the amendments and not to continue to upset the House with her constant reference to constitutional outrage.
We talked on the previous occasion about the issues raised by the noble Viscount's amendment. There is not much I can add to what I said before. The Government can sympathise with the thinking behind the amendment as it is intended to ensure that the worker is not caught out by some sharp practice. However, I believe that we should be able to rely on common sense in this area. Subsection (9)(b) already envisages that there may be agreement between the worker and the employer as to the deadline within which the records must be produced. In the same spirit I would hope that employers and workers can reach a sensible agreement about when the records are produced. It seems disproportionate to seek to regulate that timing. Furthermore, as I pointed out in Committee, it is somewhat inflexible to follow the approach proposed by the amendment. On some occasions it may suit both parties to see the records at a time outside the working hours of the individual concerned. Yet the amendment would have the effect of preventing such a sensible arrangement. For those reasons, I hope very much that the noble Viscount will not move his amendment.
Baroness Miller of Hendon: My Lords, I listened with enormous care to the noble and learned Lord. I was surprised that he referred to my upsetting the House with constitutional matters. It seems to me that the Government are bringing forward lots of constitutional matters which undoubtedly are upsetting many parts of your Lordships' House. I certainly did not hear any murmurs of upset on the few remarks that I made.
I quoted from the noble and learned Lord the line about discouraging some employers who may be tempted to use unfair tactics or dissuasion. I said that that sounded like intimidation to me and not that the noble and learned Lord was saying it. I said that if a minder came onto the premises I might feel some kind of intimidation. However, I totally accept what the noble and learned Lord said on that point, and not for anything would I upset him. In fact he was smiling at me very nicely at the end, but he was not smiling at me at the beginning when he said those words.
I am amazed that the noble and learned Lord continues to say that one may not go onto the premises. He referred to subsection (8)(a) and then put subsection (8)(a) and (b) together. I think that we will have to agree to disagree on that one. However, with regard to the copies, the noble and learned Lord said that he is sure that that is the normal way for that to happen. Yet he continues to say that by providing that that is what should happen, it would in some way weaken the Bill. I cannot agree. I shall certainly withdraw the amendment at this stage and read very carefully what the noble and learned Lord said. However, I reserve the right to return to the matter again at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 18 to 27 not moved.]
Clause 11 [Failure of employer to allow access to records]:
[Amendment No. 28 not moved.]
Lord Haskel: My Lords, I beg to move that the Report stage be now adjourned. In moving this Motion, perhaps I may suggest that the Report stage begin again not before 8.35 p.m. If we are to get through the Motion of noble Lord, Lord Campbell of Alloway, during the hour, perhaps I may suggest that the noble Lord, Lord Campbell of Alloway, speaks for not more than 10 minutes, the noble Lord, Lord Dubs, for not more than 12 minutes and all other speakers for not more than five minutes.
Moved accordingly, and, on Question, Motion agreed to.

Guardsmen Fisher and Wright
7.36 p.m.
Lord Campbell of Alloway Lord Campbell of Alloway rose to move to resolve, That an humble Address be presented to Her Majesty praying that Her Majesty should exercise the Prerogative of Mercy to release Guardsmen Fisher and Wright from mandatory life imprisonment in exceptional circumstances as other available mechanisms would unduly delay their release.
The noble Lord said: My Lords, I am more than content to treat this as if it were a dinner hour debate, which in effect it is. In the wake of your Lordships' debate on 23rd June, the Secretary of State set up a review to which this Motion now relates. My noble friend Lord Dubs explained the procedure on 6th and 16th of July in context with the amendment moved by my noble friend Lord Tebbit. This review is a welcome initiative which enhances the purpose of this Motion. The Secretary of State proposes to give her decision as to release towards the end of August. It is accepted that immediate release from a mandatory life sentence for murder presupposes time for due inquiry. This is a matter for the executive under delegated remit of the Royal Prerogative. It is acknowledged by statute; not the judiciary, not the legislature.
The Government Chief Whip was good enough to inform me this afternoon that it is not the intention of the Government to oppose this Motion; and for this relief I am indeed most grateful. If this Motion were to be carried, the humble Address, when received, would be sent straight off to the Secretary of State. It would serve as a representation from your Lordships' House, confirming the opinion already expressed in favour of immediate release, as sought indeed by my noble friend Lord Tebbit, but by other means. Such is the practical effect of the form in which the Motion is cast, which would be of considerable persuasive consequence without any hint of confrontation with government.
The Secretary of State would take into account all representations and all affidavits and documents on which your Lordships concluded that the findings as to
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culpability were fundamentally flawed and that the conviction was a grave and manifest miscarriage of justice. The Secretary of State would no doubt take into account that the amendment of my noble friend Lord Tebbit—supported by my noble friend Lord Cope of Berkeley—was to send a strong signal for release as soon as possible. On that your Lordships' House is unanimous.
But one has to accept that until the debate of 23rd June both Secretaries of State were bound to rely on the findings of the judge,
"that there was no possible justification for either Fisher or Wright to have opened fire as they knew they were not exposed to any appreciable degree of danger and that McBride whom they shot was unarmed".
These findings are the ultimate degree of culpability and indeed were reflected in the last decision of the Secretary of State on 17th June on remission by the court on 22nd May. These findings were based on partial and wholly unsatisfactory evidence, contrary to early accounts given to the police by three residents of the New Lodge area of Belfast hostile to these armed foot patrols, who said that when the lance sergeant in charge of the patrol stopped McBride, he searched him; and so was found by the judge to be unarmed.
According to the affidavit evidence of the lance sergeant, as confirmed by Guardsman Williams—the fourth man in the patrol—and CSM Dunn, the platoon sergeant in various aspects, the lance sergeant did not search McBride who indeed attempted to evade, and evaded, the proposed search.
The noble and gallant Lord, Lord Inge, then CGS, and who, alas, is unable to speak today, but would have wished to have done so, and the noble Lord, Lord Thomas of Gresford, identified as the crux of the case whether or not the lance sergeant searched McBride. If he did not, according to the documents in the Library, the findings which supported conviction and have since thwarted release, are wholly untenable.
The question is whether these findings will continue to thwart release—findings which your Lordships concluded on 23rd June, on the documents in the Library, and in the light of the speeches made, were fundamentally flawed. As to this, the noble Lord, Lord Dubs, has said, quite reasonably, that no assurance can be given as this would pre-empt the decision of the Secretary of State.
It is therefore of cardinal importance that a representation, a strong signal, a message—call it what you will—as to release as soon as possible should be sent to the Secretary of State by your Lordships as an exercise of mere persuasion. As a means to this end, noble Lords on all sides of the House are respectfully invited to support this Motion.
The narrative is wholly based on affidavit evidence in the Library and is devoid of any embellishment. On 4th September Fisher and Wright—first-class soldiers of good character, experienced in anti-terrorist drill and practice—were part of a foot patrol with Guardsman Williams, as armed soldiers in aid of the civil power in the New Lodge area of Belfast under the command of Lance Sergeant Swift, a reliable patrol commander on

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his fourth tour of duty in Northern Ireland. New Lodge was a high-risk area of terrorist activity, where, under the aegis of the provisional IRA, the doors are kept open as an escape route and where in recent weeks these patrols have come under persistent attack from coffee-jar bombs, which are improvised grenades containing shrapnel, semtex and a detonator with a killing radius of 30 metres.
Lance Sergeant Swift, if called to testify, would have said:
"at the morning briefing on 4th September and orders of the day, the threat of attack from coffee-jar bombs was stressed as the patrol would be out for over two hours; that it was well known to the patrol that the coffee-jar bomb was often directed with a plastic bag from behind the engine of a parked car; that it was an extremely dangerous, easily concealed weapon, designed to be used against such foot patrols; that leading the patrol he had cause to stop McBride, who with an arm across his waist was holding something bulky under his jacket. Fisher covered him, Wright covered down the street, Williams covered the rear.
"The lance sergeant started to question McBride and when he gave his name and address the lance sergeant knew that the RUC was searching at that address. The lance sergeant tried to make radio contact but failed. He said, "I'll search you. Empty your pockets onto the wall", and again tried to make radio contact. Before he was able to search, McBride grabbed the earpiece of the radio from the lance sergeant's ear and lunged at him. The lance sergeant recoiled and McBride made a dash for it, vaulting over the wall and railings. As McBride did so, he pulled from his jacket a thin white plastic bag containing a solid looking cylindrical object, which the lance sergeant thought would be a coffee-jar bomb to be used against the patrol in a "come on" ambush.
"The lance sergeant made a dash to catch him but fell to the ground. McBride ran towards the wall. The lance sergeant shouted, "Grab him". Fisher tried to grab him but failed. The lance sergeant did not shout, "Don't shoot". They all went in pursuit. McBride was gaining on them, still with the bag in his hand, heading towards a parked car. Three yellow card warnings, "Army—halt or we'll fire", were given and disregarded. McBride was shot, still running with the bag in his hand towards the parked car. Wounded, he fell behind the parked car and then struggled to a house. It was then that the lance sergeant shouted, "Don't shoot". The area was deserted. There was no one about until after the shooting".—[Official Report, 23/6/98; col. 218.]
The colonel—who, with the company commander, saw Fisher and Wright when they returned to barracks before they were arrested on 4th September and interrogated on 4th and 5th and charged by the RUC with murder on 5th—has deposed that when he saw them they were "shocked" and said that they acted in good faith, believing that their lives and the lives of the patrol and others, were in danger. They said that they fired in accordance with the terms of engagement.
The colonel also deposed that in his belief they acted in accordance with the terms of engagement as armed soldiers in aid of the civil power on the streets of Northern Ireland; and that those under his command were in danger 24 hours a day, seven days a week—a belief supported on 23rd June by the noble and gallant Lords, Lord Bramall and Lord Inge, the noble Lord, Lord Chalfont, my noble friend Lord Vivian and all noble Lords who spoke to this.
According to paragraph 10 of the affidavit of the lance sergeant (to be found in the Library) a few days before the trial, he was questioned by two RUC officers,
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one of whom had questioned Fisher and Wright on 4th September. I quote from that passage:
"Their aim was to get me to alter aspects of my statement"—
that was the recorded interrogation of 10th September 1992, two years before trial—
"indicating my firm recollection [of] having seen what I believed to be a coffee-jar bomb. The questioning was aggressive. I refused to alter a single word".
At the trial neither the lance sergeant, Williams nor Darren were called to testify. The evidence of Fisher and Wright that they acted in good faith in accordance with the terms of their engagement, was rejected.
The noble and gallant Lord, Lord Inge, said on 23rd June that,
"This was not just a routine patrol". [It had] "specific tasks … based on hard intelligence. There had been more than 20 attacks [on these patrols] with lethal coffee-jar bombs and 18 incidents of shooting and in one a guardsman had been killed";
namely, Shackleton. There is no doubt about the threat they feared. He added:
"it is totally understandable that Fisher and Wright acted as they did".—[Official Report, 23/6/98; col. 226.]
That was from the then CGS. He said that the conduct of the trial in all aspects relevant to conviction was "incredible". That was the word that he used. I beg to move.
Moved to resolve, That an humble Address be presented to Her Majesty praying that Her Majesty should exercise the Prerogative of Mercy to release Guardsmen Fisher and Wright from mandatory life imprisonment in exceptional circumstances as other available mechanisms would unduly delay their release.—(Lord Campbell of Alloway.)
7.50 p.m.
Lord Bramall: My Lords, like, I suspect, a number of other noble Lords, I do not fully understand the exact constitutional position of the Queen's Prerogative of Mercy, imagining that Her Majesty is bound to act on the recommendation of the very Minister or Ministers to whom, so far, our pleas and urgings, although utterly reasonable and widely supported, have fallen on deaf ears.
What I do know, however, is that the two Scots Guardsmen, Guardsman Fisher and Guardsman Wright, having already served what amounts to (taking into account normal remission) a custodial sentence of between eight and nine years, for what might have been a tragic, split-second error of judgment, but which they believed constituted (under the circumstances) their duty, should now be released forthwith. They should not have to suffer any longer the reality and stigma of a life sentence which, although mandatory under the law for the offence for which they were convicted, was wholly inappropriate in terms of justice; nor would it be other than invidious if the decision on their release was to be delayed just so that it could be entwined with political considerations affecting the release of terrorists on both sides. After all, those are the very people whom the whole training of soldiers such as Fisher and Wright was designed to thwart.

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So, if the Motion in the name of the noble Lord, Lord Campbell of Alloway, to present an Humble Address to Her Majesty the Queen will help to persuade the Secretary of State for Northern Ireland that the time really has come to initiate the release of Guardsman Fisher and Guardsman Wright, I most readily support it.
7.52 p.m.
Lord Vivian: My Lords, I have served in Belfast, as thousands of others have done. Before going to Northern Ireland, every regiment receives excellent, well prepared and highly sophisticated training. I have patrolled in the remarkably unpleasant and dangerous New Lodge area of that city where Fisher and Wright were on the day that MacBride was killed. I know how those guardsmen felt when they started their patrol that day and the immense strains and pressures they were under.
Although Her Majesty's Government do not accept responsibility for the defence submissions or for the judge's verdict, they have overall control over the mounting of the case for the prosecution. I should like to bring to the attention of those in authority and to the general public the fact that there are serious concerns about the trial of Guardsmen Fisher and Wright, concerns which, in my humble opinion, amount to a gross miscarriage of justice.
A number of questions arise from the new sworn affidavits, which have been placed in the Library, which I have read with great care. I should like to know why that evidence was never produced to the court. If it had been presented to court, the outcome of the trial might have been very different.
I wish to concentrate on four important facts. The first issue is the search. Swift denies searching MacBride, and Williams has corroborated his statement. In my view, it is clear that Swift was physically prevented from searching MacBride. Why did Swift order the three men in his patrol to grab MacBride? Presumably, because he had not been able to search him by then. If he had searched him and found nothing, he would not have given chase, thus endangering their lives even more. If MacBride had nothing to hide, why did he evade being searched? Presumably, because he was carrying a coffee-jar bomb.
The second fact is that all four members of the patrol saw MacBride carrying a transparent plastic bag in which was a cylindrical object. Under existing regulations, that gave the patrol every right to adopt the action that it took.
Thirdly, the inhabitants of the New Lodge area are particularly resourceful at removing incriminating evidence from the scene of an incident. It is no wonder that no coffee-jar bomb was found on MacBride as he would have dropped it off as he went through 15 Upper Meadow Street.
My fourth point concerns the evidence given by the three local residents. In this unpleasant New Lodge area, it is not unknown for people to give false evidence when required to do so. The witnesses cannot be said to be impartial. Indeed, one of those witnesses had 12 convictions for shoplifting and others for receiving
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and handling stolen goods, for disorderly behaviour and for failing to surrender to bail. Their evidence for the prosecution was unreliable and inconsistent.
Both Swift and Williams have said that there were no bystanders. Swift has said that there were no civilians in the immediate area. The total lack of civilians was most unusual, particularly as it was the school holidays and around 10.20 in the morning. It has been my sad experience that that is often a sign of an ambush. My personal view is that that ambush was thwarted because of the sudden and unexpected appearance of MacBride. In IRA terms, anything that does not go according to plan is immediately aborted as the IRA takes no unnecessary risks. It is most unlikely that there would have been three bystanders out on the street under those circumstances.
Furthermore, when the adrenalin is flowing very fast through the body, the automatic reactions by a soldier conform to the drills and commands learnt in training. Under those immense pressures, the mind is normally incapable of using words that have not been practised and rehearsed time and time again during training. To read that three mythical bystanders said that they had heard radically different versions, interspersed with foul language, of the laid-down command, "Army, halt or I'll fire", is so unlikely as to be, in my judgment, quite inconceivable. In any event, how could the three alleged bystanders have observed the search or heard the commands shouted by Fisher and Wright in Upper Meadow Street, some distance away with so many houses between them and where the incident took place?
I should like to ask the Minister why the prosecuting authorities decided to prosecute when the veracity of the bystanders' evidence is in doubt.
In conclusion, the Minister informed us in our previous debate on this that the Secretary of State can at any time, if she thinks fit, release a person serving a term of imprisonment for life providing she consults with the Lord Chief Justice and the trial judge, if available. Why does she not do so? Are those two men, who were merely carrying out their duty for the nation, to languish in prison when others, many of whom have committed unspeakable crimes, are to be released? It is at this point that the whole matter becomes political. There has been a gross miscarriage of justice and it must be put right as soon as possible.
7.57 p.m.
Lord Chalfont: My Lords, I rise to support as strongly as I can the Motion in the name of the noble Lord, Lord Campbell of Alloway. I should like noble Lords for one moment, if they can, to put aside thoughts of the Scots Guards with their great reputation and powerful image and to remember that we are talking about two young Scotsmen, Jim Fisher from Ayr, who was aged 24 at the time, and Mark Wright from Arbroath, who was aged 19. Those two young men did not go out that day to kill innocent people. They went out to perform what has already been called their duty in aid of the civil power—in other words, to help the police to protect innocent people from those who were out that day intending to kill. That is what those two young men were doing.

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On 4th September 1992, the day with which we are concerned, there was an incident and someone, innocent or otherwise, was killed. As the noble and gallant Lord, Lord Bramall, pointed out, it might have been an accident, an error of judgment. I make no comment on that. However, as the noble Lord, Lord Vivian, hinted, I think it is very difficult for anyone who has not stood in a jungle clearing in Malaya, in a terrorist village in Cyprus, or in the African bush with a small patrol, to comprehend how such an accident might have happened. These young men were in none of those places but in a part of Northern Ireland known to be a dangerous area. They were in an urban terrorist area in which their regiment and other patrols had already been fired upon and attacked and in which one of their own comrades had been shot by an enemy sniper. While that was in their minds, before them was a man who, when ordered to be searched as a suspect carrying some offensive weapon, seized the earpiece of the patrol commander's radio set and made off in an attempt to escape. If I had been the patrol commander to whom that had happened I would have expected my soldiers to take some fairly vigorous action. Having studied the evidence to an extent I believe that what these soldiers did they were perfectly entitled to do. Indeed, were I the patrol commander I would have expected them to do it.
I understand that there was no way in which a lesser charge could have been brought. If any charge was to be brought it had to be murder. There was no way in which they could be tried for manslaughter, culpable homicide or any other offence. But one wonders whether they should have been prosecuted at all. I believe that in the light of the evidence the prosecution was unwise, unsafe and unsound.
I make one other point which may not be entirely relevant but is always in the back of my mind. I refer to the message that this kind of prosecution sends to soldiers and others who have to act in aid of the civil power and, having done what they consider to be their duty, are not criticised, reprimanded or punished under army regulations but are charged with murder and sent to prison for life. I believe that we should be asking ourselves some very serious questions in respect of that matter.
I conclude, as have other noble Lords, by saying that it is long past the time when these two young men should be released from prison. We do not want ponderous reviews or any lengthy reconsideration of the matter. If these two men are still in prison when terrorists under the peace process or the great agreement are released, ordinary, intelligent, decent people in this country will find it very difficult to understand. If the Secretary of State cannot or will not act now to secure the immediate release of these young men, perhaps the Motion of the noble Lord, Lord Campbell of Alloway, is the only way to do it. I strongly support the Motion.
8.3 p.m.
Lord Westbury: My Lords, I thank my noble friend Lord Campbell of Alloway for tabling this Motion. I declare my interest as a Scots Guard who has been
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concerned with this situation for a number of years and has taken part in Written and Oral Questions and debates on this subject. On 23rd June 1998 the House concluded on the basis of affidavits and documents that the finding of culpability was fundamentally flawed. My noble friend Lord Campbell of Alloway has referred to the evidence that Lance Sergeant Swift would have given, confirmed in various respects by Guardsman Williams, who was the fourth man in the patrol, and Company Sergeant Major Dunn, the platoon sergeant.
Since 23rd June affidavits from Guardsman Williams and Company Sergeant Major Dunn have been placed in the Library. They show the salient aspects of that confirmation. I apologise for being long-winded but I believe that it is relevant to read the affidavit of Guardsman Williams:
"After we had been patrolling for about two and a half hours Lance Sergeant Swift told us that the Celtic Club search was over and all they found was one CB radio. We were then directed to proceed north east up Spamount Street to 'satellite' and give cover for another search at Templar House. We patrolled back up Spamount Street in normal operational order, staggered with two on each pavement, and as we got to the bottom of Trainfield Street I saw Lance Sergeant Swift run forward very quickly to intercept a youth coming down Trainfield Street from New Lodge Road where Templar House was located, and the three of us took up protective positions.
I was on the corner of Trainfield Street and Spamount Street. There was a low fence on top of a brick wall and I squatted down by this to give cover principally the way we had come. Meanwhile Guardsman Fisher took up a kneeling position in Spamount Street behind me looking forward to cover Lance Sergeant Swift and the suspect and Guardsman Wright [were] on the far side of Spamount Street looking the opposite way to me. We were probably 15 to 20 yards apart. I heard Lance Sergeant Swift go up to the suspect to check his personal details. This was standard (name, address, age, where he had come from and where he was going). I could not hear the suspect's answer but I did hear Lance Sergeant Swift trying to make contact with Company Headquarters, but he could get no reply. I could see a little out of the corner of my eye and I am definite that the suspect was NEVER searched. He was only with the lance sergeant for just over one minute and there would not have been time to do a body search …
I should also state quite clearly that there was nobody in Spamount Street anywhere near its junction with Trainfield Street. There were definitely NOT two men mending a car with its bonnet up, and indeed there was nobody out in the streets at all. I then heard Lance Sergeant Swift shout 'Grab him' and I could see the earpiece had been pulled off his head. I then saw the suspect jump over into the garden at the corner of Trainfield Street and Spamount Street. He jumped both garden fences and as he did so I saw a white plastic bag in his right hand tightly rolled round a cylindrical-shaped object. It would be about 10 to 12 inches long and four to five inches in diameter. I naturally thought it must be a coffee jar bomb.
Guardsman Fisher nearly grabbed him but he managed to run very fast with the white bag still in his right hand and we all set off in pursuit.
Both Guardsmen Fisher and Wright who were leading shouted 'Army, halt or I fire', but he turned quickly left into Glenrosa Street when they both gave him another challenge. I also shouted 'Army, halt or I fire', or words to that effect. He ignored these challenges and turned right down Upper Meadow Street.
We had all our weapons, equipment and body armour and I felt we were not going to catch him. When he was about two-thirds of the way down Upper Meadow Street on the left where I believe there was a blue car parked, I heard Guardsman Fisher give a third challenge and when the suspect did not stop he fired one shot which appeared to miss. Guardsman Fisher fired standing and he was on the right hand side of the road. Guardsman Wright was two to three

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yards behind him on the left side. I was behind Guardsman Fisher and Lance Sergeant Swift was behind me, still trying to make radio contact as we ran into Upper Meadow Street.
Shortly after that Wright got down into the kneeling position and tired two shots. Almost immediately Guardsman Fisher fired another two shots and the suspect staggered by the car …
Immediately after the shooting, doors started opening and a lot of people came into the street but we had seen nobody outside during the chase".
As to the affidavit of Company Sergeant Major Dunn:
"I was platoon sergeant of these two soldiers and the rest of their patrol of four men with Lance Sergeant Swift in command and Guardsman Williams.
It was very quiet with a few local people moving about the streets. They obviously observed the patrols and stayed inside.
On no account would two or three members of a team crowd round a suspect as they would present easy, static, targets, and would not be giving proper cover.
At about 10.30 hours we heard shots from a northerly direction and we proceeded in the direction of the shots as far as we could. The whole patrol got there as a group in about three or four minutes. When we got there I saw Sergeant Swift who said there had been a shooting. I understand that Guardsmen Fisher and Wright had shot at a suspect who had assaulted him [Lance Sergeant Swift] and who they thought was carrying a bomb, and who had refused to stop after repeated warnings.
I, and other patrols, stayed in the area and helped to put up a cordon but before this an ambulance arrived to take the wounded suspect to hospital.
I would like to emphasise that the area in which the incident took place was extremely hostile and dangerous for any patrols and the longer a patrol stayed in one area the more likely were the Provisional IRA to set up an opportunity for sniping or bombing. I was amazed to learn that the two soldiers were found guilty of murder two years later when they were only doing their duty in accordance with their training.
I knew them both well and they were first class soldiers, of good character and experienced in anti-terrorist drills and tactics. Lance Sergeant Swift was a reliable patrol commander on his fourth tour of duty in Northern Ireland".
They have been in custody since 4th September 1992. They have served the equivalent of a nine-year determinate sentence. The opinion of your Lordships' House, as expressed on 23rd June and 16th July, is that they should be released immediately. The Motion should be carried so that a representation to this effect should be sent to the Secretary of State for consideration on the current review.
8.12 p.m.
The Earl of Carlisle: My Lords, I too thank the noble Lord, Lord Campbell of Alloway, for raising yet again the case of the two unfortunate Scots Guardsmen who have been languishing in gaol for over five years.
It is a privilege to follow the noble Lord, Lord Westbury, who, among others, has worked tirelessly both inside and outside your Lordships' House to obtain redress and release for the two unfortunate guardsmen who, through a tragic error of judgment, found themselves convicted of murder by due process of law and received mandatory sentences of life imprisonment.
I am sure that all noble Lords in this House, including noble and gallant Lords who have had the privilege to wear the uniform of the King in war or peace, or of the Queen in war, peace or counter-insurgency operations, will agree with me that on exercise or on operations we
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have all made errors of judgment but fortunately for most of us, more by luck than any other reason, we who served in Northern Ireland did not end in gaol.
I had the privilege after serving in Northern Ireland of serving with the British Army of the Rhine when General Sir Michael Gow was the Commander-in-Chief. He is a most distinguished infantryman. He is quoted as saying that in a similar situation to that faced by the two Scots Guardsmen he would probably have done exactly the same. So would I.
I rise to support the Motion of the noble Lord, Lord Campbell of Alloway, that an Humble Address be presented. As far back as 20th April of this year I asked a supplementary oral question to the one put by the noble Lord, Lord Burnham. I asked the Minister of State, the Minister who is in his place today, if he would consider putting the case to the Sovereign so that Her Majesty could exercise Her prerogative of mercy.
The Minister replied that the Life Sentence Review Board procedure and the sentence review body would be running in parallel and that in the circumstances he did not think it would be appropriate to refer the case elsewhere. I did not agree with him then and I shall not agree with him if at the end of this debate he cannot agree to endorsing a mechanism which would speed up the date of the release, the Life Sentence Review Board being too slow.
My view is further reinforced by a statement from the Northern Ireland Office dated 6th July 1998. The Secretary of State stated in another place that she had received the papers and would be considering those papers "during the next few weeks". How many weeks? We are entitled to know, as indeed are the guardsmen.
Secondly, the papers which have to be considered are extensive. I recall my service at various headquarters, in particular the Northern Ireland headquarters, where the staff were often directed by the Commander, Land Forces, to produce a brief, a paper or information for the Northern Ireland Office within 24 hours, or, indeed, within 24 minutes or even two-and-a-half minutes. Woe betide the staff office if that work was not produced on time. Why the delay in this case? Does not the noble Lord agree with me that this new review by the Secretary of State smacks of prevarication? Why is that the case?
The second avenue of approach is the sentence review body. As every schoolboy knows, this is a mechanism for granting convicted terrorists early release. This is an entirely inappropriate method for the release from gaol of the two Scots Guardsmen. First, they are not terrorists. Secondly, they never were terrorists. Thirdly, they were sent to Northern Ireland by the state—by previous Secretaries of State for Defence and for Northern Ireland—to keep the peace, to prevent terrorism and to apprehend or, indeed, kill terrorists.
I turn to the prerogative of mercy. I have been much influenced by the paper by Christopher Vincenzi, Crown Powers, Subjects and Citizens. He states that crimes may be pardoned absolutely or conditionally. He draws the distinction between the free pardon, which wipes out not only the sentence but the conviction, commutation of the sentence, and, finally, remission, which is

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reduction of a sentence or penalty without changing its character. Between 1990 and 1993 there were 88 free pardons. During the same years there were 250 remissions of sentence. Surely the two guardsmen are deserving of the prerogative of mercy?
I shall conclude on this point. Last week on the West Front of Westminster Abbey 10 statues were unveiled to 10 Christian martyrs who died for their faith this century. Over the past quarter of a century over 3,000 people—3,000 too many—have died in Northern Ireland or, as I prefer to call it, been murdered; some—the vast majority I suggest—because either they were in the wrong place at the wrong time or they died for their faith. Although these statues are prominent, less attention is given to four statues below the 10 Christian martyrs. They represent the four cardinal virtues: truth, justice, peace and mercy.
I suggest that truth, in the matter of this tragic incident, will never be readily available or complete, as the evidence is incomplete. Justice was done, I hope, but it was very harsh. Peace may come to Northern Ireland, we all hope that. And finally, mercy: it is time—it is long overdue—to show mercy to these two guardsmen. That is the reason why I support the Motion before your Lordships' House.
8.18 p.m.
Earl Attlee: My Lords, I apologise to the House for missing the first few minutes of this debate. I also remind the House that I have an interest. I notice, yet again, that we have a defence Minister, Lord Gilbert, in his place on the Front Bench. We are, indeed, grateful for his interest.
I have spoken on this matter before and I declare that I am broadly content with the Motion, but I believe that my noble friend Lord Tebbit may have a superior amendment or lever to pull later.
Lord Tebbit: My Lords, I am grateful to my noble friend for giving way. I doubt whether my device will be superior; I think that it may be more effective; and it will undoubtedly be triggered on Wednesday.
Earl Attlee: My Lords, I thank my noble friend for that intervention.
I agree with every word that I have heard this evening. I should like to draw the Minister's attention to a possible condition that the Secretary of State may decide to impose on any licence given. As Guardsmen Fisher and Wright are serving soldiers, it would be possible to remit them to the charge of their commanding officer. They would then effectively be confined to barracks. That would obviously be a temporary measure. It would of course make the Secretary of State's decision easier and less risky and therefore more speedy. I hope that the Minister will draw that possibility to the attention of his right honourable friend the Secretary of State.
8.20 p.m.
Lord Thomas of Gresford: My Lords, there is a long and ancient history which supports the presentation of an Address to Her Majesty on every matter of foreign and domestic policy, including the administration of justice. We support fully the presentation of such an Address in this exceptional case. It is a step forward that the Government have indicated to the noble Lord, Lord Campbell of Alloway, that they do not intend to oppose his Motion.
The Monarch swears in the Coronation Oath that justice in this country shall be "administered in mercy". Sir William Blackstone, the great legal historian, traced the history of the royal pardon to the laws of Edward the Confessor. He said:
"the royal prerogative of mercy … is part of the power of the Sovereign of his pure grace to show mercy to an offender by mitigating or removing the consequences of conviction".
It is important to understand that a pardon does not necessarily remove the conviction itself. We have an adversarial process in this country which is designed to examine the evidence, but only the evidence which is put before the court: our processes are not concerned with the unfettered pursuit of the truth. In this case I have already commented on the fact that the trial judge could act only on the evidence placed before him. Judges have the power to call witnesses themselves, but it is rarely exercised. Here, the prosecution chose to rely upon the evidence of three bystander witnesses on the vital question as to whether the sergeant searched McBride. Their account at the trial differed in significant ways from their original statements to the police. Neither Swift, nor Williams, who was with him, was called to give evidence for the prosecution. The defence cannot be criticised for refusing to put their clients' interests at risk by calling them themselves.
The conviction then went on appeal, but the Court of Appeal has a limited function: it is only to supervise the operation of the lower courts and to correct their mistakes. It is not to hold a re-hearing of the facts which the tribunal of fact—here the judge alone—has decided. In this country the principle that the verdict of a jury is virtually sacrosanct prevails. It is less obvious that that principle—the findings of fact by a single judge in a Diplock court—should apply to those decisions.
A jury, from time to time, will acquit where justice demands. It may acquit in the teeth of the evidence. The Clive Ponting case is an example where a jury acquitted even though directed by the trial judge to convict. A jury may also convict when to the professional eye there is inadequate evidence, but almost invariably the instinct and common sense of the jury are correct. A judge who sits alone is trained professionally to analyse and sift the evidence that is put before him. His instinct is ruled out. If mistakes may happen in jury trials—we know that they do—how much more likely are they to occur in a Diplock court under the adversarial system?
The prerogative of mercy recognises that the judicial process is fallible and that the evidence before the court does not necessarily give rise to the right decision. The prerogative has different uses: to be merciful—for example, a free pardon to someone who is terminally

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ill; to substitute one form of punishment for another—for example, the commutation of a death sentence to life imprisonment; but, importantly and thirdly, to recognise that the public interest may no longer be furthered by having an offender serve the full penalty imposed. That may be because of doubts that arise subsequent to a trial about the soundness of the conviction.
Lord Justice Watkins, when he was considering the Bentley case—which is back today before the Court of Appeal—in 1994 (QB at 365) said:
"The prerogative is a flexible power and its exercise should be adapted to meet the circumstances of the particular case. We would adopt the language of the Court of Appeal in New Zealand….'the prerogative of mercy can no longer be regarded as no more than an arbitrary monarchial right of grace and favour'. It is now a constitutional safeguard against mistakes".
Here, the Address is aimed not necessarily at a free pardon: Her Majesty is asked to exercise the prerogative of mercy:
"to release Guardsmen Fisher and Wright from mandatory life imprisonment in exceptional circumstances".
It is to ask for a remission of their sentence. The noble and gallant Lord, Lord Bramall, inquired as to the constitutional position. The exercise of the prerogative has, by convention, rested with the Secretary of State since the accession of Queen Victoria in 1837 because, as Fenton Bresler once put it, she was regarded as both too young and of the wrong sex to preside over a "hanging" cabinet.
Perhaps I may therefore draw the Secretary of State's attention to the George Davis case in 1976 when, as noble Lords will remember, a long public campaign went on. The then Home Secretary, my noble friend Lord Jenkins of Hillhead, as he now is, decisively exercised the power of prerogative. He said:
"I do not have evidence of Mr. Davis' innocence to justify my recommending a free pardon. I have considered whether I should refer the case to the Court of Appeal … But this would be a lengthy process and it is not at present clear that all the relevant material now before me could be considered by the court. My conclusions about the shift in the balance of evidence in the case are such that it would not be right for Mr. Davis to remain in prison any longer. I have therefore decided to recommend the exercise of the Royal Prerogative to remit the remainder of Mr. Davis' sentence. He is being released today".
When later questioned about whether that created a precedent he said:
"I always look extremely carefully at all individual cases … I am sure my hon. Friend and the House will appreciate, it is important that one should proceed in these matters with expedition and decisiveness when one is convinced that it is right to do so. One should not get in to the position of not being able to do what is right in a particular case because to do so would mean having to act in the same manner in a number of cases which may be far less strong".— [Official Report, Commons, 11/5/76; cols. 230–33.]
So the question of precedent is not something that should hold back the Secretary of State.
There is an overwhelming case for saying that the full truth did not come out at this trial due to the selectivity of witnesses called by the prosecution. But, irrespective of that, it is manifestly unjust that those two guardsmen should remain any longer in prison.
Much concern is exercised for the sensitivities of the Protestant and Catholic communities in Northern Ireland. They are to get—perhaps rather more quickly
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than public opinion in England, Wales and Scotland might allow—their unique and novel machinery for remission. The basic sense of justice and fair play which moves the people on this side of the water should equally move the Secretary of State to release these men, not, as the noble Lord, Lord Chalfont, said, after ponderous review but tomorrow.
8.30 p.m.
Lord Kingsland: My Lords, in this harrowing matter it is important to keep distinct two issues: the safety of the conviction and the speed of release. The affidavits have revealed incompatibilities and inconsistencies in the evidence; and your Lordships have referred to many of those today. These matters are now before the Criminal Cases Review Commission, and in time it will report to the Court of Appeal. Unfortunately, until its report reaches the Court of Appeal there will be no opportunity of bail for the guardsmen. If they are to be released now, we have to consider other mechanisms, one of which is before your Lordships' House this evening; the Royal Prerogative of Mercy.
However, there are three other mechanisms. One is the Northern Ireland (Sentences) Bill which is due to come on to the statute book at the end of this month. I understand from the noble Lord, Lord Dubs, that releases are expected from the beginning of September.
Of the two other mechanisms, one is the general power of the Secretary of State, after consultation with the trial court and the Lord Chief Justice, to release those who have been convicted of a life sentence. Finally, there is the regular reporting of the Life Sentences Review Board. So we have four ways in which release can be manifested now. Each one of those is a decision for the Secretary of State for Northern Ireland.
What has the noble Lord, Lord Dubs, said about the way in which the Secretary of State is confronting that decision? It is revealed in the debates of 6th and 16th July. We understand that the Secretary of State is not confining herself to any one of those procedures but is looking at substantive matters which underlie all four: the court decision; the affidavits; the decision of the review body; listening to what your Lordships have said; and considering wider issues as well.
In the debate on 16th July, the noble Lord, Lord Dubs, said that he expected the Secretary of State to complete her consideration by the end of August. In the Opposition's submission, the end of August is far too close to the beginning of September when the first releases are expected under the Northern Ireland (Sentences) Bill.
Let us consider the dilemma that those guardsmen faced—a dilemma which is not new to British servicemen. It is a tightrope. If one disobeyed orders, not so long ago one could be shot. If one pulled the trigger in the wrong circumstances one could be hanged. Fortunately, the consequences of getting it wrong are not so drastic as they used to be; but the dilemma is exactly the same.
Let us contrast that with the dilemma—if that is the right word—of the terrorist. The two situations are not morally on the same plane. In Her Majesty's Loyal

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Opposition's opinion, it would be wholly wrong for the Government to intermingle the release of these men with the releases we expect of former terrorists at the beginning of September.
Noble Lords: Hear, hear!
Lord Kingsland: My Lords, the test of the Government's moral authority is this. Release the guardsmen now or your moral equivocation will be plain for all to see.
8.32 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs): My Lords, I should like to add my voice to those of the other noble Lords in complimenting the noble Lord, Lord Campbell of Alloway, on securing this further debate on the cases of Guardsmen Fisher and Wright.
I also acknowledge the assiduous efforts that the noble Lord continues to make on behalf of these two men. He has spoken with great feeling, but has not allowed this to cloud his judgment and has argued in measured and considered terms. I congratulate him on that.
I have listened carefully to all that has been said, and I thank other noble Lords who have contributed their views. They too have spoken with great strength of feeling because of the seriousness with which they regard the issue.
Perhaps I may deal with a number of specific questions before I turn to the brunt of the argument I wish to put forward. The noble Lord, Lord Vivian, asked what evidence was produced in court, a question implicitly asked by other noble Lords. He also asked some details about the prosecution case. The decision whether to prosecute is a matter for the Director of Public Prosecutions on the basis of the evidence available. It would be inappropriate for a Member of the Government to pass any comment on the judgment that the Director of Public Prosecutions entered into and the method by which the case was conducted. It is not a matter for the Government.
The noble Earl, Lord Carlisle, asked about the length of time of the Secretary of State's review, to which, by implication the noble Lord, Lord Kingsland, also referred. There is no prevarication. Indeed, as I made clear in the Statement to this House on, I believe, 6th July, on behalf of the Secretary of State, she indicated that she was speeding up her consideration of the case. The Secretary of State had previously suggested that she would wait until the October deadline, as indicated by her review last year of the case put forward by the Life Sentence Review Board. The Life Sentence Review Board was going to consider the matter again in October. But in the meantime the Secretary of State was going to advance her consideration of the case. That was the announcement I made. Given the complexity of the evidence, and given that the Secretary of State also has to refer the matter to the Lord Chief Justice and the judge who presided when
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the case was first heard, these matters take a little time. However, I assure noble Lords that there is no question of any prevarication on the part of the Secretary of State.
The noble Lord, Lord Kingsland, suggested, as did other noble Lords, that it would be wrong for the Secretary of State to make a decision at about the same time of the first releases under the Northern Ireland (Sentences) Bill, assuming that Parliament agrees to pass the Bill. I was not suggesting that there was a relationship between the two decisions. I was answering questions about the likely timetable as regards the Secretary of State's consideration of the case of the two guardsmen; and the timetable as regards the sentences review board commissioners' releases.
This House has debated the matter on a number of occasions. On the first or second occasion I was asked whether the fact that there was to be a Northern Ireland (Sentences) Bill about early release would delay any decision about the two guardsmen. At that point I indicated that the guardsmen would have the right under the sentences Bill procedure to apply for their case to be considered. I was not suggesting that there was any comparison between their situation and that of terrorists. I was simply answering a question.
In subsequent debates I was again asked about the different procedures open to the guardsmen. There is no sense in which the Government are saying that there is a parallel between the two guardsmen and what will happen to terrorists under the Northern Ireland (Sentences) Bill. I seek to make that distinction because the noble Lord, Lord Kingsland, suggested that there was some overlap in the Government's mind. There is clearly no overlap, but the timetables relate to the situations that I have described. If they happen to overlap within a month of each other, it is because the Secretary of State does not wish to delay her process; and under the sentences Bill the commissioners will also have to make their decisions as regards their priorities and timetable.
Perhaps I may return to the substance of the debate. The Motion set down by the noble Lord, Lord Campbell of Alloway, moves,
"That an Humble Address be presented to Her Majesty praying that Her Majesty should exercise the Prerogative of Mercy to release Guardsmen Fisher and Wright from mandatory life imprisonment in exceptional circumstances as other available mechanisms would unduly delay their release".
I am grateful to the noble Lord, Lord Thomas of Gresford, for his clear exposition of the history of this prerogative and the circumstances in which it has been used.
Perhaps I may say at the outset, that I do not intend to oppose the Motion presently before this House. However, for reasons which the House will readily understand, I and other Ministers shall abstain in the unlikely event that the issue comes to a Division. There are, however, some points which I should like to bring to your Lordships' attention.
The exercise of mercy by the Crown dates from the Middle Ages. Until the 18th century, the issue remained a matter for the personal decision of the Sovereign. By the mid-19th century, however, the convention had

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developed that the prerogative would be exercised on the advice of one of Her Majesty's principal Secretaries of State. Such advice must, of course, be provided with the greatest conscience and good care.
The prerogative is used in respect of criminal convictions and generally only where it is impractical to refer the case to an appellate court, and where there is new evidence which has not been before the courts and which demonstrates conclusively that no offence was committed, or that the defendant did not commit the crime. I have in mind, for example, a case in which there is new hearsay evidence which is absolutely compelling, but which would be inadmissible in court.
Turning to the specific question of the possible exercise of the Royal Prerogative of Mercy in the cases of Guardsmen Fisher and Wright, I would stress that very full rights exist for an individual aggrieved by his conviction, or sentence after trial on indictment. The right, however, to petition for the exercise of the Royal Prerogative of Mercy is in addition to the normal right of appeal to a superior court and the fact that a person has not exercised his right of appeal is no bar to the consideration of a petition.
The Royal Prerogative of Mercy is not, however, a means of duplicating the ordinary machinery of appeal and save in genuinely exceptional circumstances the Secretary of State for Northern Ireland, and indeed the Home Secretary for cases within his jurisdiction, would normally expect a prisoner to use that machinery to the full.
The special circumstances in which it may be appropriate to entertain exceptionally an application for the exercise of the Royal Prerogative of Mercy, notwithstanding that some avenue of appeal may still be open to the applicant, are not to be determined by a rigid rule; each case must be considered on its own merits.
Lord Renwick of Clifton: My Lords, I am grateful to my noble friend for giving way. We are united in all parts of this House in wanting to see the earliest possible release of these Guardsmen. However, when the Address, which I and almost everyone else supports, is presented to Her Majesty, as the Minister and others have said, she will seek the advice of the Secretary of State who is conducting her own review of the matter.
In passing on to the Secretary of State the apparently unanimous view of Members of this House, will the Minister point out that this House contains many distinguished jurists and, so far as I am aware, not one has risen to defend the continued imprisonment of these Guardsmen?
Lord Dubs: My Lords, I thank my noble friend for what he has said. I shall ensure that the attention of the Secretary of State is drawn to the whole debate; to all the points that have been made; and to the fact that many noble Lords have a great deal of legal knowledge and experience and many have direct experience of serving in the Army on the streets of Northern Ireland. I shall ensure that the Secretary of State is aware of the body of knowledge and experience that has been brought to bear and the views that have been expressed.
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I return to the argument. In the guardsmen's cases most, but not all, of the domestic avenues of appeal have been exhausted. The guardsmen's application for leave to appeal to the House of Lords was refused on 6th March 1996. There still remains open to them, however, the ability to make an application to the Criminal Cases Review Commission, to which I have already referred in the debate in this House on 23rd June. This, of course, is a matter for the guardsmen to consider in consultation with their legal advisers.
As your Lordships' House will be aware, the Royal Prerogative of Mercy is generally exercised by the Sovereign in certain ways only: first, the grant of a free pardon, (that is, an unconditional pardon); secondly, the grant of a conditional pardon, whereby the penalty is removed, on condition that a lesser sentence, or penalty, is substituted; and, thirdly, the remission, or partial remission, of a penalty.
Given all that the noble Lords have said tonight, I assume that the noble Lord's petition seeks exercise of the Royal Prerogative in the last mentioned form, as a means of securing the guardsmen's release from prison, in the hope that an application to the Criminal Cases Review Commission will secure through the courts the quashing of their convictions.
As I have advised noble Lords in previous debates on these cases, the position from which my right honourable friend the Secretary of State for Northern Ireland and I must approach these cases is that the guardsmen have been convicted of murder in accordance with the law.
These convictions arose from an incident while the guardsmen were on patrol in Belfast. The incident was carefully and thoroughly considered by the prosecuting authorities and then independently adjudicated upon by the courts. The courts held that the guardsmen had no lawful justification for firing at Peter McBride. I appreciate that many noble Lords have elaborated on the evidence and on the further evidence that has come to light as a result of the efforts of the noble Lord, Lord Campbell of Alloway. Therefore, I appreciate that there are views which go further than the decisions of the court.
The Motion before us this evening states that "other available mechanisms would unduly delay" the release of the guardsmen. However, I must, with all due respect to this House, point out that at present there are several possible avenues open to these particular prisoners through which release is a possibility. In respect of matters which fall to my right honourable friend the Secretary of State, no decision has been made but, as I informed this House last Thursday, my right honourable friend would hope to announce her decision in the latter part of August.
For the benefit of the House, I will set out the various avenues by which the cases of the guardsmen can, or will, be considered for possible release in the weeks and months ahead. I cannot of course prejudge the outcome of any or all of these possible avenues, nor should anything that I say be seen in any way to prejudice any of those possible outcomes. These avenues fall into two

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categories. I appreciate that some noble Lords have mentioned them, but it is right that the Government's attitude to them should be made clear.
Those in the first category are already active. They are the current consideration of the guardsmen's cases by the Secretary of State in light of correspondence from their solicitors, and the consideration of their cases by the Life Sentence Review Board in October this year.
My right honourable friend's consideration, as I have already indicated, will take a few weeks in view of the need to ensure a careful and thorough consideration of the considerable volume of paperwork involved in the cases.
With regard to the Life Sentence Review Board, preparation of the fresh reports required for the board's second consideration of the cases commenced. The guardsmen have been advised of this in writing. They, and their legal advisors, will be invited to make representations.
The second category of procedures available to the guardsmen are applications to the proposed sentence review commission, and applications to the Criminal Cases Review Commission, subject to discussion with their legal advisors. The timing surrounding the sentence review commission is subject to the wishes of Parliament, and subsequently a matter for consideration by the proposed commission in light of an application from the guardsmen.
In summary, therefore, two means of obtaining the guardsmen's release from custody are already under active consideration. Of the other two means, one is already available and the second will shortly become so, should the guardsmen choose to take the opportunity to make representations.
Lord Tebbit: My Lords, I am grateful to the Minister for giving way. Which powers did the Secretary of State use when she released IRA terrorists to campaign for a "yes" vote in the referendum?
Lord Dubs: My Lords, my understanding is that they were not released permanently. Those were temporary release powers which she already has. In one case, release was on compassionate grounds; in other cases it was for the specific reasons to which the noble Lord has referred.
I have listened carefully to the views that have been expressed and I sense the opinion of this House. I am fully aware of the strong and sincere feelings which have been expressed. I shall ensure that the Secretary of State is made fully aware of the whole debate and the feelings that have been expressed. As I indicated, the Government do not intend to oppose the Motion.
8.47 p.m.
Lord Campbell of Alloway: My Lords, I shall be brief. I must be allowed to thank all noble Lords who have spoken in the debate, and in particular the noble Lord, Lord Dubs, for his humane and sensitive handling of this truly unfortunate affair. No noble Lord has spoken in opposition to the Motion. With the leave of
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the House, it is not profitable to discuss for the third time today the amendment of my noble friend Lord Tebbit; I should prefer to deal with it on Wednesday if it were tabled again.
I seek the common sense, composite wisdom of your Lordships' House which reposes with the Cross-Benchers and the Back-Benchers. I commend acceptance of the Motion.
On Question, Motion agreed to; and it was ordered that the Address be presented to Her Majesty by the Lords with White Staves.

National Minimum Wage Bill
8.50 p.m.
Further consideration of amendments on Report resumed on Clause 11.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 29:
Page 8, line 40, leave out ("shall").
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 30 to 34. The mandatory sentence for anyone convicted of murder is life imprisonment. I do not know of any other penalty where the judge does not have some sort of discretion, even if it is only the power to take into account "special reasons" for offences like the road traffic offences. However, if I am mistaken and there are others, there are enough lawyers in this House whom I am sure will correct me on the point.
There are to be just two offences for which the judge has no discretion to take into account mitigating factors, extenuating circumstances or even the financial ability of the offender to pay the fine. One of those offences is murder; the other is thwarting the ambitions of the trade unions. In simple terms, the clause as drawn gives the employment tribunal absolutely no discretion whatever as to the penalty to be imposed on an employer who fails to produce records or to accord an employee his rights under Clause 10. The combined effect of the amendments is to do just that.
To give the employment tribunal some discretion, the combined effect of the amendments would make Clause 11(2) read as follows:
"Where an employment tribunal finds a complaint under this section well-founded, the tribunal shall make a declaration to that effect and may make an award that the employer pay the worker such sum not exceeding 80 times the hourly amount of the national minimum wage (as in force when the award is made) as it considers just and equitable having regard to the employer's default".
If the owner of the struggling corner mini-market objects to the presence of the minder that the employee chooses to bring into his shop, then its owner is to be fined 80 times the national minimum wage—that is, £288—until the national minimum wage is increased, which I am sure it inevitably will be. Never mind that, due to the owner's lack of command of the English language, he did not understand the employee's rights under Clause 10(9)(b), and never mind that a fine of

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£288 means that the owner cannot meet his cash-on delivery commitments for stock, and loses a vast and probably ruinous amount of trade as a result.
At the same time as this happens, International Conglomerate plc fails to give access to the records of one of its employees within 14 days due to some bureaucratic blunder. It, too, is fined £288—that is less than it spends on paper clips in a year and less than it spends on flowers for the director's dining room in a month. Two offences committed inadvertently—but offences nonetheless—with vastly different financial consequences to the employers. At the same time, the owner of a sweat shop is caught paying a pittance in cash, with no records kept, to the illegal immigrants he employs under the threat of reporting their presence to the authorities if they complain. As no records can be produced, the employer is in breach of Clause 10(1)(b). For deliberately flouting the Act, this unscrupulous employer will be fined the same amount for each offence; namely, £288.
When we considered these amendments in Committee on 15th June, the noble and learned Lord the Solicitor-General explained that the reason why the Government did not want to give the employment tribunal any discretion was because the provision would,
"enable cases to be handled much more swiftly and effectively in a tribunal, there will be no need for the tribunal to spend time considering specific amounts".—[Official Report, 15/6/98; col. 1412.]
I see that the noble and learned Lord the Solicitor-General was admitted to the Bar in 1974, long after the demise of the old Bow County Court. One of the many no doubt apocryphal stories told about that court was the occasion when a barrister arrived five minutes late and discovered that his case had been heard without him. When he complained, the usher said, "Well, you see Sir, we dispense with justice very quickly in this court." That is what the Government are saying should happen in these cases: in the interest of administrative expediency, employment tribunals should dispense with justice. How many cases are the government expecting anyway?
I spent 20 years as an active magistrate. No matter how long our list, we always felt it our duty to consider the penalty no less carefully than whether or not the defendant was guilty. A few extra minutes, sometimes less, is no burden to those exercising a judicial function. The Government are saying that, in the case of the inadvertent failure to produce a single sheet of paper or a delay perhaps caused by the illness of the one-man owner of a small business, there should be no mitigation of the penalty. The Government are saying that, contrary to the criminal law, the means of the defendant to pay a fine are not to be taken into account. The Act deprives the tribunal, exercising a judicial function, of any discretion to show mercy in appropriate cases—all in the interests of expediency, and a few minutes of its time.
In passing, I should just like to mention Amendment No. 43 relating to Clause 19, tabled in the name of the noble Lord, Lord Clinton-Davis. Of course we welcome any provision that will allow an employment tribunal to correct a mistake. We shall not object to that amendment
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when it is called. The pity is that the Government have not seen fit to frame the Bill so as to enable tribunals to avoid a different error altogether; namely, the error of committing an injustice because of a lack of discretion over the penalties.
The noble and learned Lord the Solicitor-General holds one of the most senior offices in our judicial system. He needs no permission from the Secretary of State to concede the point that I am making. On the contrary, it is the Secretary of State who, constitutionally, must be guided by his advice. The House of Lords is the highest court in the country. We cannot—we must not—send out a signal that justice is something that can be dispensed with in the interests of expediency. I urge the noble and learned Lord to use the discretion that he undoubtedly has and here and now agree to accept these amendments. I beg to move.
Lord Falconer of Thoroton: My Lords, we had a full debate on these identical amendments in Committee. In the meantime, my noble friend Lord Clinton-Davis has written to the noble Lord, Lord Monson, in response to particular points which he raised during that debate. I believe that a copy of that letter has been placed in the Library of the House.
I believe that I set out fully and clearly in that debate the Government's position on the making of awards under Clause 11. However, perhaps I may briefly go over the ground again just to indicate the Government's thinking on the matter. The amendments to Clause 11 require a change of wording from "shall" to "may". This is essentially a procedural clause. It concerns the failure of an employer to allow access to records, and the awards that can be made by employment tribunals in that event, as well as the period for bringing a complaint.
All the amendments in the group are directed towards that clause. As the noble Baroness rightly said, their overall effect would be to allow a tribunal to be more lenient to an employer who had not complied with his obligations to allow access to records under Clause 10. Indeed, the amendments would have that effect or would be ancillary to it.
Amendment No. 32 takes the proposed discretionary power a step further in that it gives the tribunal the option of awarding less than the full amount (which is currently set at 80 times the national minimum wage rate) to the worker, to be paid by the employer. Amendment No. 33 is linked with the discretionary notion as it would give the tribunal the right to consider what is a just and equitable award.
The noble Baroness is characteristic with her style. She makes this right to award 80 times the national minimum wage if somebody fails to comply with an order to produce documents appear parallel to the charge of murder. She says that it is similar in that respect and that it is the only offence in the country, apart from murder, where there is a fixed penalty. Perhaps I may make three points in that respect. The noble Baroness's argument is well put. However, I would submit that it is somewhat disproportionate. First, this is not a criminal sanction; it is a civil sanction for failure to comply with

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what we all agree is a necessary procedural right in relation to the minimum wage. Secondly, it is most certainly not alone in the way that such rights are enforced. By way of an example, I should point out to the House that there is a right to each employee to be told the reasons for his dismissal. If he is not given the reasons, then, assuming that the tribunal found the complaint well founded and all the procedural grounds had been gone through, it must award two weeks' pay to the employee. Again, that is a fixed amount. That is an incredibly sensible way of dealing with this kind of problem, rather than creating a whole series of discretionary matters which will be argued before employment tribunals. Far from being good for an employer, that would be bad. There would be some merit in what the noble Baroness had said if an unsensible or disproportionate amount had been prescribed for not complying, but with regard to the proposed present minimum wage the amount is £288. I appreciate that may be a significant sum for some people, but their remedy to avoid paying that sum is to comply with their obligations under the law.
The noble Baroness gave two examples of where that may cause problems. The first concerned a situation where—as she put it—an employee might introduce a "minder" into a shop whom the employer does not like. I think I responded to that point when I responded to the previous amendment. Secondly, there is the matter of someone who is unable to produce records within 14 days. A judgment has to be made about how long it takes to produce records. We take the view that most people—particularly small employers—will be able to produce wage records within 14 days if they have only one or two employees. Frankly, that seems a perfectly reasonable period of time within which to do that.
One can choose to impose an easy, sensible remedy which is easily obtained in the industrial tribunal and which is not disproportionately severe or, as the noble Baroness would have it, a remedy in an industrial tribunal dependent on submissions by both sides which would involve greater legal complexity and arguments before the tribunal. I think we have the balance right. We have indicated the importance of not complying but our remedy is not disproportionate and it is quick. Although we have considered carefully the proposals that have been made by the noble Baroness, in our view we have the balance right. I believe the more one thinks about it the more one recognises that. I hope that, in the light of the explanation I have given, the noble Baroness will feel able to withdraw her amendment.
9 p.m.
Baroness Miller of Hendon: My Lords, perhaps when I read the noble and learned Lord's explanation in detail I may agree with him. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 30 to 34 not moved.]
Clause 13 [Appointment of officers]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendments Nos. 35 and 36:
Page 10, line 2, after first ("any") insert ("Minister of the Crown or").
Page 10, line 3, at end insert ("Minister,").
The noble Lord said: My Lords, in moving Amendments Nos. 35 and 36, I wish to speak also to Amendments Nos. 38, 40 and 41. These linked amendments are essentially technical. They are designed to maintain the status quo of the enforcement arrangements envisaged in the Bill. I have written to the noble Baroness, Lady Miller, and to the noble Lord, Lord Razzall, with a detailed explanation of the amendments. There may be some points I have not covered in writing, in which case an explanation or a letter will be placed in the Library. I beg to move Amendments Nos. 35 and 36 en bloc.
On Question, amendments agreed to.
Clause 15 [Information obtained by officers]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 37:
Page 11, line 36, at end insert—
("(6A) Subsection (2) above does not affect the title or rights of—

(a) any person whose property the information was immediately before it was obtained as mentioned in subsection (1) above; or

(b) any person claiming title or rights through or under such a person otherwise than by virtue of any power conferred by or under this Act.").

The noble Lord said: My Lords, in moving Amendment No. 37, I wish to speak also to Amendments Nos. 39, 42, 64, 65 and 67. The purpose of these amendments is essentially to clarify the situation. They are being proposed to avoid any doubt and inconsistency as to who holds information for the purposes of the information exchange provisions of the Bill. What I had to say before applies equally in relation to the letter and/or the explanation. I beg to move.
On Question, amendment agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 38:
Page 11, line 37, after ("any") insert ("Minister of the Crown who, or").
On Question, amendment agreed to.
Clause 16 [Information obtained by agricultural wages officers]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 39:
Page 11, leave out line 42.
On Question, amendment agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendments Nos. 40 to 42:
Page 12, line 2, after ("any") insert ("Minister of the Crown,").
Page 12, line 3, after ("that") insert ("Minister,").
Page 12, line 27, at end insert—
("(bb) in relation to information obtained by an officer acting in an area which is partly in England and partly in Wales, the Ministers mentioned in paragraphs (a) and (b) above acting jointly;").
On Question, amendments agreed to.
Clause 19 [Power of officer to issue enforcement notice]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 43:
Page 14, line 21, at end insert—
("(9) The powers of an employment tribunal in allowing an appeal in a case where subsection (8) above applies shall include power to rectify, as the tribunal may consider appropriate in consequence of its decision on the appeal, any penalty notice which has been served under section 21 below in respect of the enforcement notice.
(10) Where a penalty notice is rectified under subsection (9) above, it shall have effect as if it had originally been served as so rectified.").
The noble Lord said: My Lords, the purpose of this amendment is to cut unnecessary red tape and prevent enforcement from being potentially weakened in a specific area. I beg to move.
On Question, amendment agreed to.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 44:
After Clause 22, insert the following new clause—
PROVISIONS OF INSOLVENCY ACT 1986 AND BANKRUPTCY (SCOTLAND) ACT 1985: FAILURE TO PAY NATIONAL MINIMUM WAGE
(" . The failure of an employer to pay any wages at all as required under a contract of employment or a contract for services shall not be treated for the purposes of this Act as a failure to pay the national minimum wage when such failure is due to the operation against the employer of any of the provisions of the Insolvency Act 1986 or the Bankruptcy (Scotland) Act 1985 or the corresponding bankruptcy and insolvency legislation in force in Northern Ireland and no enforcement procedures under sections 17 to 22 of this Act shall be undertaken in such cases.").
The noble Baroness said: My Lords, I return to this amendment which I moved in Committee because the Government have not met the case that I advanced on 15th June. I must say at the outset that I accept the blame for this because on re-reading the wording of my original amendment I feel that it did not make my point sufficiently clearly, although I thought it did when I spoke. I therefore propose a revised amendment which I believe fully meets the Government's objection. I regret that I have been unable to specify precisely the primary legislation affecting Northern Ireland but I do not have the research facilities available to the Government. That can no doubt be rectified on Third Reading.
In presenting my amendment on a previous occasion, I said that this was not a device to enable an employer to escape paying the national minimum wage by the simple expedient of not paying any wages at all. This was to cover the situation where an employer becomes bankrupt or goes into liquidation or receivership and is unable to pay the wages due to the staff. The noble and learned Lord the Solicitor-General proceeded to demolish the case for an employer saying, as it were, "Look, we are a bit short of money at the moment. Do you mind not being paid anything at all for the next few weeks?" That was the case that I had expressly said I was definitely not putting forward. The Minister began the passage I just quoted by saying:
"Putting aside a case of bankruptcy or liquidation".
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But that was exactly the case I asked to be covered. The fact that the noble and learned Lord the Solicitor-General acknowledged that bankruptcy and liquidation were a separate case makes the case for this amendment.
Clause 31(8) of the Bill provides a partial but slightly ambiguous defence by an insolvent employer from the criminal sanctions constituted by Clause 31(1). This amendment makes the position absolutely clear: an employer who is already suffering the misfortune of insolvency is not only absolved from criminal prosecution but from the other sanctions and penalties provided for in Clauses 17 to 22. The Solicitor-General has already recognised that that situation is a special case. All I ask is for the Government to put a statutory seal on it. I beg to move.
Lord Falconer of Thoroton: My Lords, I am grateful to the noble Baroness for explaining the purpose of the amendment. It is worth making a general point first about the operation of bankruptcy and insolvency law. Its purpose is not to penalise the employer or anyone else, as the amendment would seem to suggest. Instead, I regard that legislation as providing a systematic means of sorting out a financial mess that has inevitably arisen. That must be in the interests of everyone concerned.
If the amendment is intended to highlight the position of the Crown as a preferential creditor of an insolvent business, capable of emptying the pot before employees can get their hands on any remaining assets, I have to say that that is not my understanding of how the process works.
I am advised that preferential creditors do not rank ahead of each other in that way. In other words, if there are £500 of assets to distribute and £5,000 worth of preferential claims, each preferential creditor gets 10p in the pound—whether that creditor is the Crown or an employee in respect of pay. So the somewhat alarmist scenario envisaged by the noble Baroness in Committee, along the lines that the Government could take all the money and prosecute the employer for failure to pay the national minimum wage, seems to be based on a misapprehension of the way in which bankruptcy and insolvency law operates. The scenario to which I have referred was suggested by the noble Baroness in Committee. The way in which she presented this amendment indicates that it is designed to cover the situation to which I referred then.
In any event, it is highly unlikely that a genuinely insolvent company or bankrupt employer would be subject to criminal prosecution for failure to pay the minimum wage if he had first postponed other payment obligations not involving a criminal offence and was still unable to pay the minimum wage due to financial collapse. Where he does have sufficient money, however, it seems only right that he should use that to pay the minimum wage rather than to discharge other civil debts. Clearly, a position in which employers were entitled to postpone payment of the minimum wage to their lowest paid workers before postponing payment of purely civil obligations would be unacceptable.

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The criminal offence which the Bill creates in that respect is the refusal or wilful neglect to pay the minimum wage. Clearly, the surrounding circumstances would be taken into account in deciding whether there should be a prosecution in any particular case. Again, referring to what was said in Committee, I do not believe that over-zealous officials would or could take advantage of the situation. Such officers will in any event be working to the remit provided by the Secretary of State.
The wider question is how a worker can secure any outstanding payments owed to him by the business which is unable to pay him irrespective of the minimum wage legislation. In that event our concern is to ensure that the worker receives his money, not to punish the insolvent employer.
There are already mechanisms in place for such payments to be made to workers where a company is unable to meet its obligations. The Department of Trade and Industry's redundancy payments service can make certain payments to the former employees of insolvent employers under the Employment Rights Act 1996.
The question of whether a worker has received the national minimum wage therefore becomes subsumed in the larger question: has he received his wages at all? If it transpired that the wages owed were actually lower than the minimum required because the employer had been breaking the law, the redundancy payments service would pay the minimum wage to which the worker was entitled.
I appreciate that the explanation I have given is rather dense in the sense that it relates to provisions under insolvency and bankruptcy law. I do not think that anybody, whatever the time of day, could have taken it in at one shot. However, I believe that I have dealt with the points that the noble Baroness legitimately raised. I could not reasonably expect the noble Baroness, or anybody, to take all of my reply in at the speed at which I delivered it. I suggest that the noble Baroness reads my reply in Hansard. She will then realise that there is no need to pursue the amendment.
Baroness Miller of Hendon: My Lords, I thank the noble and learned Lord for saying that his explanation was rather dense. I began to think that perhaps I was rather dense. I shall read it very carefully. I shall certainly take his advice. At this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 [The right not to suffer detriment]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 45:
Page 16, line 40, after ("will") insert ("or might").
The noble Lord said: My Lords, it may be for the convenience of the House if we also consider Amendments Nos. 46 and 47. The purpose of these amendments is to ensure that there is no loophole in protection against dismissal or detrimental action for workers and employees who would be entitled to the full rate of the national minimum wage or who were about to qualify for a higher rate, even when no rate has
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yet been set in the months following commencement of these clauses. These are technical matters. I beg to move.
On Question, amendment agreed to.
Clause 25 [Right of employee not to be unfairly dismissed: Great Britain]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 46:
Page 18, line 27, after ("will") insert ("or might").
On Question, amendment agreed to.
Clause 26 [Right of employee not to be unfairly dismissed: Northern Ireland]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 47:
Page 19, line 36, after ("will") insert ("or might")
On Question, amendment agreed to.
Clause 28 [Reversal of burden of proof]:
9.15 p.m.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 48:
Page 21, line 6, leave out ("qualifies or, as the case may be, qualified") and insert ("does not qualify or did not qualify").
The noble Baroness said: My Lords, in moving Amendment No. 48, I wish to speak also to Amendments Nos. 49 and 50. This little clause, tucked away half-way through the Bill, involves a matter of major constitutional importance. I hope that the noble and learned Lord the Solicitor-General will not get very upset about that and tell me that the House will get upset about it. As I pointed out to him, the Government will be bringing in much more major constitutional issues.
The marginal note to Clause 28 describes it as providing for the,
"Reversal of burden of proof',
a frank admission that the Government, contrary to the safeguards long since established by our courts and the common law, are requiring the defendant to claim to prove his innocence.
How do the Government seek to justify this? Let me again remind your Lordships of the flamboyant language used by the Minister of State at the Department of Trade and Industry in Committee in the other place. He said:
"For far too long, low-paid workers, who have little or no representation, have found it almost impossible to do anything about their employment status or to gain access to basic minimum rights in the labour market".
Later he said:
"I am putting the case not only for the Government but for millions of workers who, over the years, have not had the opportunity to make their voices heard".
I see that the noble and learned Lord the Solicitor-General is nodding his head. I am surprised. I did not think that he would agree with those comments, put in exactly that way. But there we are; we live and learn. I believe that that was a remarkable piece of rhetoric from a warrior in the class war, riding to the rescue of the huddled masses of the oppressed proletariat with which he imagines the country abounds.

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That is why I did not think that the noble and learned Lord the Solicitor-General would agree with the words from the other place.
This piece of nonsense clearly demonstrates the mind-set that afflicts the Government. This clause is nothing less than an attempt by the Government—freely admitted by the Minister in the passages that I have just quoted—not to create a level playing field in what, after all, amounts to a civil piece of litigation about a civil dispute but to make the employer face an uphill struggle. Not that I have ever heard of a downhill struggle. It is an uphill struggle in which the employer is required to do the almost impossible: to prove a negative.
What is the justification for that? Again, let me quote the Minister of State in the other place. At 2.30 in the morning he asked the Committee:
"Where does this information come from … Who maintains records about national insurance contributions and pay-as-you-earn issues? … Who maintains the record of hours worked by the employees?"—[Official Report, Commons, Standing Committee D, 29/1/98; col. 649.]
Hardly pausing for breath—rather like me at this stage of the evening—he triumphantly answered himself, "The employer does". Five out of 10. But the employee knows what he has been paid; the employee knows how many hours he has worked.
More than that, Clause 12 of the Bill empowers the Secretary of State to make regulations requiring the employer to provide the employee with detailed information, including, quoting the words of Clause 12(2)(b):
"prescribed information for the purpose of assisting the worker to determine whether he has been remunerated at a rate at least equal to the national minimum wage during the period to which the payment of remuneration relates".
Surely the Minister of State should have known that this provision was in the Bill.
The reality is that this Bill will not impinge on the large commercial concerns, which probably are already paying the national minimum wage; or, if they are not, will easily do so by simply putting a penny or two on the price of a loaf of bread, a gallon of petrol or whatever their product is. No, it will most affect the little corner shop. Often that shop is owned by people who arrived in this country penniless, fleeing from more real oppression than the Minister of State in the other place could ever conceive of. It will most affect the corner shop, the petrol station, the local hairdresser's, the flower shop and manufacturing businesses, which are the ones which provide a huge number of jobs; the little shops and small manufacturing businesses which are pestered with the over-zealous enforcement of petty regulations emanating from Brussels, while their continental counterparts disregard them with impunity because their governments do not take them seriously.
Apart from the data supplied by his employer in accordance with the Bill, and which the employee only has to read to get all the information he needs, rights are granted by Clause 10 to see what is in the employer's records as to wages paid, hours worked, and so on. The noble and learned Lord the Solicitor-General gave them to me again at great length. That disposes of the Government's argument that the common law right
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of the owner to have any case against him positively proved and not to have to prove his innocence is due to the fact that the employer is in some sort of dominant position. I believe that, if anything, the reverse is the case. The noble and learned Lord the Solicitor-General is either nodding or shaking. It must be very difficult for him. He is wincing; that is something new.
At the Committee stage I tried to explain the problems of an employer in having to prove a negative: that he had not failed to pay the national minimum wage. How could he do such a thing when, in the case of a small business, there were probably no computer records; when, in common with most employers, wages would be paid in cash; when requiring a receipt each pay day was not a practical probability; and when an employee could reasonably be expected to protest vigorously and immediately if the payslip which the Bill will require to be given to him does not correspond to the cash that he receives in his hand?
What was the Government's response to what the Solicitor-General was kind enough to describe as my "eloquent and effective speech"? I see that the noble and learned Lord remembers that phrase well. Eloquent it undoubtedly was; but effective it clearly was not. The Government absolutely refused to budge one single iota.
What was the Solicitor-General's explanation for that obduracy? He prayed in aid the Industrial Relations Act 1971 which he pointed out had been introduced by a former Conservative administration. He did not mention that that Act, which he now endorses, had been fought tooth and nail by the Labour Party. But perhaps that is what always happens when parties get into government.
It is with considerable trepidation that I stand here about to argue a point of law with one of the two distinguished Law Officers in the Government. The noble and learned Lord, Lord Falconer, is, after all, a QC, when in fact I must confess that I never even finished eating my dinners in Middle Temple—something which I now very much regret.
However, I have to say, with the greatest respect, that his analogy is not a correct one. Under the Industrial Relations Act 1971 and the Acts which succeeded it, culminating with Section 94 of the Employment Rights Act 1996, an employee has the right not to be unfairly dismissed. The noble and learned Lord actually mentioned that earlier this evening.
Under Section 92, the employee has the right to receive a written statement of the reasons for his dismissal. The written statement, or indeed reasons given verbally, constitute an allegation of facts which the employer, as the person making the allegation, has to prove. What point will there be in the employee going to the Employment Tribunal and saying "I was dismissed unreasonably. There were no facts which justified it."? Full stop. Where would the case go from there if the employer had previously had to justify and prove his case?
Of course the employer, as instigator of the act of dismissal, and the one contending that it is justified, has the responsibility of proving the facts on which he is relying. That is exactly the same situation as applies under the present Bill. The employee is alleging that

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he did not receive the national minimum wage, whether because of a simple underpayment or an unauthorised deduction. Therefore it is up to him to prove it.
The Minister conjured up a picture of employees,
"in a moderately vulnerable position. Many of them may be isolated from other workers".
However, they will not be isolated by the time they have called in the assistance of the enforcement officer, and the minder that Clause 10 permits to assist him in the invasion of his employer's premises—perhaps I should not use the word "invasion"; I know the Minister does not like it; I can substitute the word "entry"—pursuant to Clause 10(8)(a) of this Bill.
Then the noble and learned Lord called in aid the touching picture of this wretched downtrodden employee,
"sometimes not very well able to express themselves in English".—[Official Report, 15/6/98; col. 1428.]
However, many of the small businesses we constantly talk about in connection with this Bill—the corner shops—are owned by people who work hard, long hours, often harder and longer than their employees, who also have English as their second language.
That is the problem with both this whole Bill and the Government's attitude to any suggested amendments, however reasonable. The Government are still motivated by the thinking of old Labour. It is them and us; workers on one side, employers on the other. And the workers are always right.
The workers rights to receive the national minimum wage are fully protected under this Bill. They do not need to be added to by depriving the employer of an elementary historical right to have any case against him proved before he has to answer it. I beg to move.
Lord Falconer of Thoroton: My Lords, earlier in the evening, I understood the noble Baroness to accept that records should be kept by employers. I understood her to disagree with us as to whether it was right that a particular form of records should be on the face of the Bill, but I understood her enthusiastically to accept the proposition that all employers, whether employers in a corner shop or ICI, should keep records. That explodes the whole of her case in relation to Clause 28.
As she rightly acknowledged, Clause 28 states that the burden of proof in showing, first, that someone is an employee or a worker entitled to be paid the minimum wage and, secondly, whether an employee or worker had been paid the minimum wage, is on the employer. That is an important element of the Bill and more generally of the Government's enforcement strategy in relation to the Bill. The Bill extends the right to the minimum wage to workers whose employment status might often be unclear. I have in mind particularly homeworkers and agency workers. Such workers are often in low paid categories. In other words, they are among the workers whom the Bill is designed particularly to help. Often they may be working without any explicit workers' contract. Frequently they may be working on their own or without any access to representation. If such vulnerable workers believe that they have not received
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the national minimum wage, without Clause 28 the position would be that they would have to prove, first, that they are workers for the purposes of the Bill and, secondly, that they have not received the amount of the minimum wage. The effect of Clause 28 is to place this burden on employers, not workers. In any dispute about status, employers will have to show that the individual concerned is not a worker. Similarly, in any dispute about payment, it will be for the employer to show that the minimum wage has been paid.
The noble Baroness gave the example of the small shop. She accepts that the small shop has to keep records of wages. Therefore, on the basis of her position, there is obviously no difficulty about the small shop producing the records of what wages it has paid. The employee may not be in as good a position to know what he or she has been paid. The noble Baroness asks those on her right and on her left, "Why not?", and the noble Baroness, Lady Blatch, asks the same. The reason why not is that very many people do not keep a record of what they are paid. I am sure that the noble Baroness, Lady Blatch, would keep a record of what she was paid. But I can assure her that large numbers of employees, particularly low paid employees, do not keep a proper record of it. Who would have the record? The answer is the employer; even the small shopkeeper employer. I was asked what is the nature of the arrangement between the employer and the employee and whether there would be any difficulty in the person who owns the small shop explaining to an industrial tribunal what was the nature of the arrangement on which the employee was paid. I would have thought not; whereas, if it was a homeworker or someone like that, there would be considerable difficulties.
To sum up, what the clause achieves is to shift the balance a little towards the vulnerable worker who may otherwise be deterred from taking on a powerful and well advised employer or even a small employer. Underlying it all is the simple principle that those who are entitled to the national minimum wage should not be discouraged from ensuring that they get it. In the past the burden of proof has been to the advantage of employers. It is a strength of this clause and of the Bill as a whole that the burden is being shifted to the advantage of workers in the situations that I have described.
The noble Baroness proved that it was a great and substantial loss to the Middle Temple and to the Bar as a whole that she did not finish eating her dinners, because the argument that she put with such appallingly bad material was so good and so eloquent that she would have had a huge following at the Bar. I say that with sincerity. The simple point is surely this. In the unfair dismissal example, under the 1971 Conservative legislation, what is being said is that the employer is alleged to have committed a wrong—namely, unfairly dismissed someone—but, as everyone recognised, all of the detail in relation to that would in the normal case be more likely to be in the hands of the employer rather than in the hands of the employee. As a sensible, practical matter, therefore, the Conservative Government recognised that it was right to place the burden of proof on the employer. It is exactly that

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approach which is being followed here. It is nothing to do with infringing a common law principle. It is to do with being sensible and practical and making sure that justice is done in the end.
The arrangements for the Industrial Relations Act 1971 have been repeated and used frequently and successfully over the decades. The party opposite has made no attempt to change the legislation in that respect despite 18 years in power between 1979 and 1997. The effect of the amendments proposed by the noble Baroness is to negate the reversal of the burden of proof and to shift the balance back towards the employer, to a greater or lesser extent. I do not think that I need to go through what each of the amendments does, but they have been dealt with as a matter of principle which is fair enough.
The effect of these amendments is that workers would again be left in a position where an employer could seek to evade his responsibility by claiming that they were self-employed, or they would find that the presumption of non-payment would be subject to actual evidence of non-payment. The effect of this requirement would be to devalue the presumption and negate its benefit to the worker.
For example, an employee has to establish that he has not been paid the minimum wage. The employee has not kept proper records and goes to court and states that he has not been paid the minimum wage. The employer simply says, "prove it", when everyone knows that he has records. That would be a travesty of justice. Vulnerable workers would be less likely to take cases forward and, where they did so, they would be less likely to succeed. I ask the noble Baroness to consider very carefully what I have said and to think about what is practical and what is just. We appreciate the position of the small businessman, but we believe that his position is properly accommodated. Despite the eloquence of her speech, I ask the noble Baroness to withdraw the amendment.
9.30 p.m.
Baroness Miller of Hendon: My Lords, I say to the noble and learned Lord the Solicitor-General that I do not accept that the balance is always in favour of the employer because if an employee is claiming that he has not been paid the national minimum wage, how would he know that unless he had some kind of indication as to what he ought to have been paid? It goes both ways. I am glad that the noble and learned Lord thought that I argued a very poor case very well: I thought that I argued a very good case not well enough. However, I shall read what the noble and learned Lord said with great care. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 49 and 50 not moved.]
Clause 34 [Agency workers who are not otherwise "workers"]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 51:
Page 24, line 9, leave out from ("principal") to ("and") in line 12.
The noble Baroness said: My Lords, in moving this amendment I speak also to Amendment No. 52. In listening to the Minister's response at Committee stage, I was quite unable to understand why the Government were objecting to a very simple pair of amendments which neither detracted from the principles of the Bill nor reduced workers' rights, but by simply clarifying the legal position it prevented an injustice being done to an innocent employer. However, I accept that the Minister is finding it difficult ever to assume that there is such an employer. Not that the Government seem to accept the concept of there being such a thing as an innocent employer: they all seem to be unscrupulous and goodness knows what they are trying to do.
At one stage the noble and learned Lord the Solicitor-General spoke about an unscrupulous employer pretending to be in financial difficulties in order to avoid paying any wages at all. At Committee stage the noble Lord, Lord Clinton-Davis, managed to conjure up a scenario of an employer deliberately marrying an employee to avoid paying her the national minimum wage. We are not discussing unscrupulous or devious employers trying to deprive the workers of their legitimate rights. We are not discussing workers of the world who have nothing to lose but their chains. We are not involved in the rhetoric of the class struggle which I thought new Labour had thrown overboard with the rest of the socialist baggage, but it may be that, deep down, it has not.
In this amendment we are trying to see that employees get what they are legitimately entitled to under the Act, but to get it from the person who is responsible for paying them and not from a third party with whom—to use a phrase that the Minister has repeated on numerous occasions—the worker does not have a worker's contract. I believe I have said this before this evening, but one thing than a politician hates is to have his words quoted against him. I remind the Minister what he said in debate at Committee stage as regards the first amendment in the Bill. The noble Lord, Lord Clinton-Davis, said,
"The Bill makes it manifestly plain that the responsibility for"—
and we were referring to paying the national minimum wage—
"lies with the employer, and there is no alternative to that. The approach of the Bill, just as with other employment law, is based on the relationship between employer and worker".
A few moments later, he said on the subject of tips:
"customers in restaurants are not employers … They have no share in the responsibility to pay the staff the minimum wage".—[Official Report, 11/6/98, col. 1199.]
If the customers of restaurants are not employers, neither are the clients of secretarial agencies. If customers in restaurants have no share in the responsibility to pay the staff, neither do the clients of office cleaning contractors. That is notwithstanding the mental gymnastics by which the Government have changed their stance and reversed their own arguments in the 23 pages of this Bill, between Clause 1 and Clause 34, where we are now.
The Minister argued, contrary to what he said on Clause 1, that the client should be potentially liable even if he was not actually the employer. He said that that

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was because the Government were concerned that there could be cases where there was a doubt about whether the contract was with the agency or the principal. Indeed, he suggested that,
"Sometimes the existence of a contract is undoubtedly questionable".—[Official Report, 15/6/98; col. 1436].
I do not think that that is right. The existence of a worker's contract can never be in doubt. If A is working for B, that can be only as a result of a contract. However, I shall return to that point in a moment because I do not want to lose the train of my argument.
As I said, the Minister was worried about whether the worker would know with whom he had a contract. On the other hand, I said that there could never be any such doubt. As we both agreed that certainty for the worker was essential on this point, I asked myself how the Minister and I could both look at the same clause, but read it in such different ways. I therefore did what I promised to do when I withdrew the amendment in Committee. I carefully considered and read every single word that the Minister had said. As a result of that reconsideration, I believe that I have discovered the cause of our misunderstanding. The problem is that the Minister is a lawyer and I am not. The problem is the definition of "agency" in subsection (1). The legal concept of an agent is as defined in the Oxford Dictionary as,
"A person who acts for another in business, politics, etc.".
Clearly, that is not the same as what we are considering.
A secondary meaning of "agency", which has crept in recent years, is "a person or a company who provides a specified service". That is the sort of agency about which we are speaking. I refer, for example, to cleaning contractors; catering contractors; those who run works canteens; secretarial agencies; and suppliers of building workers. The people they place with the clients of their agencies are the employees of those agencies, not the employees of the clients. The real test of who is the employer is simple. It is the answer to the question: who actually engaged the worker? The client will usually never have set eyes on the worker before he or she first sets foot on his, the client's, premises. Who is responsible for the PAYE and the national insurance? Does the client pay an ongoing fee to the agency for providing the services of the employee? Can the agency substitute one worker for another if the need arises?
It is simply not credible or feasible that a worker should be engaged by "Cleaners and Dusters International", hand over his P.45 from his former employers and still not know for whom he is working, irrespective of where he was directed to perform his duties. After all, the worker may be sent to several sites in one day. That will tell him that he is not working for the office or site owner, but for the agency. By the very definition contained in Clause 34(1), an "agency worker" is someone who works for an agency and not someone who works for the client.
I refer to the misconception by the draftsman of this clause when he refers in Clause 34(1)(b) to the absence of a worker's contract. As I have just pointed out, in the phrase that I quoted the Minister repeated the same
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misconception. It is not possible for anyone to be employed by anybody without a contract. If I say to someone, "Come and work for me and I will pay you £x per week" and if he or she says yes, that is a legally binding and enforceable contract. The misconception on the part of both the Government and the draftsman was shared by the late Samuel Goldwyn, who said:
"A verbal contract isn't worth the paper it's written on".
Contrary to what the draftsman thinks and, with the greatest respect, contrary to what the Minister said, the existence of the worker's contract does not depend on the existence of a piece of paper—not even the one that the employer is supposed to supply under the Employment Rights Act 1996 in which the essential terms are to be spelled out for the employee.
The use of the words "the principal" in the clause is a misconception. The so-called agency is not engaging the worker to work for what I have called the client; it is employing someone to perform the duties that the agency itself has contracted to perform for the client to clean his office, to supply a temporary typist, to provide a hospital with a nurse, or whatever the case may be. If those duties are not performed, it is the agency that is liable to pay the client damages. The client has nothing whatever to do with the pay or the other terms of employment of the worker. His entire arrangement is with the agency, as I have demonstrated.
There is absolutely no reason why a worker should be in any doubt as to who is his employer. The Government have themselves made that clear in Clause 12 of the Bill. That clause requires an employer to provide a written statement containing "prescribed information relating to this Act". One assumes that that prescribed information includes the name of the employer. That provision completely negates the Minister's argument at an earlier stage that an employee may not know who is his employer. On the basis of the Government's drafting of Clause 12—to say nothing of the Minister's arguments that I have quoted in relation to Amendment No. 1—there is no reason whatever why the client of an agency should be saddled with the responsibility for matters over which he has no control. For that reason these amendments seek to avoid a possible injustice. In this case I do not ask the Government simply to accept the amendment; I expect them to do so. I beg to move.
Viscount Thurso: My Lords, I intervened to speak to the amendments moved by the noble Baroness at Committee stage. With the massed ranks of my party behind me I should like briefly to speak again to this matter. Having read carefully in Hansard the words of the noble Lord, Lord Clinton-Davis, I concluded that as to the principle of the clause my fears were largely ungrounded but as to the detail it was unclear that the provision achieved what was sought. At Committee stage the noble Lord said that Clause 34 should represent a belt and braces approach, ensuring that where the position was uncertain—because it was unclear whether there was a contract with either the agency or the principal—such workers should be covered. I applaud that. I agree that either the agent or the principal should be responsible.

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However, I believe that Clause 34 potentially traps both parties. For example, if in my business I employ a contracting company to install central heating, as Clause 34(1)(a) is written, should that plumber fail to obey the legislation it is possible that liability to ensure the payment of the minimum wage falls upon me as the employer of the contractor. The first matter on which I seek reassurance is whether in those specific circumstances any liability falls upon me as employer. As a sub-question, if in my contract with that plumber I require him to contract that he will obey the legislation, does that provide me with a suitable defence?
I believe that the heart of the Clause 34 is in line 11. Paragraph (b) provides that Clause 34 applies in any case where an individual,
"is not, as respects that work, a worker, because of the absence of a worker's contract between the individual and the agent or the principal".
It is unclear to me whether that deals with the agent or the principal, or both. I believe that if the words "or the principal" are deleted or the word "either" is inserted before reference to the agent or principal the Government will achieve the clarity that they seek.
Secondly, is the position that the Government are seeking to achieve that somebody must be responsible, who will be either the agent or the principal, but that if the principal has taken just cause to ensure that the agent is paying properly, he or she will not be liable simply because the agent has not obeyed the law?
9.45 p.m.
Lord Clinton-Davis: My Lords, first, can I reassure the noble Baroness, who constantly wishes to erect barricades—and I have a sense of understanding as to where she might put herself there—that we certainly have not regarded all employers as unscrupulous. That is nonsensical. After all, employers were involved in the work of the Low Pay Commission—they were involved in the consultation. They do not share the Opposition's sense of foreboding and even malice about the Bill. It is clear that the Government place great importance upon consultation with all sides of industry. That was part and parcel of what we sought to do long before the last election and since. I think that that was unworthy of the noble Baroness. She is often extremely persuasive—albeit wrong—and always entertaining. I hope she will regard that as a compliment.
The noble Baroness said quite rightly that I had referred last time—though I thought I said it was an extreme example—to somebody marrying to avoid the effects of the national minimum wage legislation.
Baroness Miller of Hendon: My Lords, when the noble Lord raised the matter I could not believe my ears, but I was about to say that maybe, if an employer had two female employees, he might suggest that the employer marries both and so commits bigamy in order not to pay the national minimum wage.
Lord Clinton-Davis: My Lords, that is on a par with most of the noble Baroness's arguments during the
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course of this debate. The fact is that I have heard of less good grounds for marriage. Of course, we were dealing somewhat ironically with the situation.
The noble Baroness said that the existence of a contract can never be in doubt. We have employment tribunals which are constantly visited with these problems. They deal with the nature of a contract, the contracting parties, the legality of contracts and so forth. These matters are not always simple; nor can they be reduced to the alleged commonsense simplicity in which the noble Baroness delightfully indulges us from time to time. She even said that I and my noble and learned friend took a rather different view because we are lawyers; that we look at these things in an arcane way almost deliberately. I would remind her, although I do not think she needs reminding, that she is married to a lawyer, and a very nice labour lawyer he is. I take umbrage on his behalf at that particular remark. Of course one would like to be able to deal in these somewhat simplistic ways, but it cannot always work out like that. That is the problem. That is why there is such a burden of case law dealing with employment matters, and this will not be immune to that.
These amendments, and the point made by the noble Viscount, Lord Thurso, to which I will come later, all relate to Clause 34 dealing with agency workers. It is quite clear that there are some misunderstandings about how the Bill works and the way in which agencies work, and they still remain. What the noble Baroness has argued, in effect, is that the principal, is, as a matter of fact, never the employer. The employer is always the employment agency which supplies the worker. I believe that that is fundamentally wrong. It may be the case in some instances but it is not the case in all instances. The DTI has an entire section devoted to enforcing employment agency standards. I regret to say that there is much case history which shows that sometimes it is not at all easy to determine who is the employer.
In some cases it is clear that it is the principal who is the employer, but not in all instances. We are dealing with the law, perhaps regrettably from the noble Baroness's point of view. There are three parties involved in the arrangements. It is not unusual for there to be more than three. The parties can come up with whatever arrangements suit them. More and more agencies use arrangements where the contract is specifically with the employer and not with the agency.
I want to make clear that there is nothing illegal about that. There are examples in almost every sector of industry. Perhaps I can give an illustration. In the world of the theatre it is often the case that an actor is supplied by an agent but employed by the theatre or film company. It is almost long-established practice. One finds such a situation in many other instances. For the noble Baroness, it is easy to identify the employer at all times, because that is the person who has the contract of employment. With respect, that is a misunderstanding of the clause because the clause does not refer to those with ordinary contracts of employment. Those are the straightforward cases. The clause relates to those agency workers who are not otherwise workers and who cannot be readily identified as being employed by the agent.

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That is the point I tried to make in earlier debates and the point raised by the noble Viscount, Lord Thurso. The contract cannot be both with the agent and with the principal. It has to be with one or the other.
The majority of agency workers is likely to be covered automatically by the Bill regardless of Clause 34 because they have the status of worker by virtue of a contractual arrangement with the agency or the agency's client whom the Bill identifies as the principal. Most people will be covered by such arrangements. We are talking about a situation where it is difficult to determine the position. There will be grey areas. It is that situation which brings in Clause 34.
I thought that we had explained that point in previous debates. We set it out in the Notes on Clauses. I hope that the noble Baroness will think again about what I have been saying. She was kind enough to say to my noble and learned friend that she will spend all of her working days and working nights reading his words. Perhaps she will do the same with what I have said, but with less emphasis. I referred rightly to Clause 34 being a belt-and-braces clause. I hope that I have dealt with that point. I think that I have covered most of the ground that I wanted to cover in relation to that amendment.
I turn now to Amendment No. 52. I do not entirely dismiss what the noble Baroness said in relation to it. It is an interesting amendment. It relates to Clause 34(2) which, in the absence of the worker's contract, defines the person with whom the agency worker is to be regarded as having a contract. I went into the matter at some length in Committee. Perhaps I may offer a resumé of those arguments.
Clause 34(2)(a) provides that the contract is regarded as being with either the agent or the principal, depending on which of them is responsible for paying the agency worker. Clause 34(2)(b) provides that, where neither the agent nor the principal is responsible for payment, the contract is to be regarded as being with whichever of them actually pays the agency worker.
The effect of the amendment would be that the agency worker would be regarded as having a "worker's contract" in all cases with the agency in the absence of such a contract or in case of doubt as to the person with whom it was held. Is that the right conclusion that we wish to draw here? It is simple; there is certainly an advantage in simplicity. But it would mean that even where it was understood by all concerned—the agency, the principal, the worker—that the principal will pay the worker, the agency has legal responsibility for paying the worker the national minimum wage. I cannot believe that that is a satisfactory outcome for such a situation.
It is not an easy point, but it is important. There is a growing tendency for some organisations to use agency workers to provide flexibility. Although the use of agency workers provides significant advantages to a client company, the uncertainty of the employment status of the worker can lead to a lack of legal protection. That is what we are concerned about in protecting this aspect of the matter.
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I said that there was some merit in the noble Baroness's proposal, although I doubt whether all agencies would agree. It would be simpler. It would be easier for agency workers to identify the person from whom they could claim—the agency. It would ensure that agencies could not use the clause as a loophole to put the onus on the client (or principal, in the terms of the Bill) to pay the minimum wage. However, it is difficult to judge the extent of the benefit because it is difficult to determine the likelihood of an agency being able to get away with such a course of action.
I appreciate the importance placed by the noble Baroness on this matter. I do not dismiss it lightly. However, we are of the opinion that the clause as drafted provides a better outcome than the amendment suggested by the noble Baroness. We believe that the amendment would go unnecessarily far by interfering too much in existing arrangements. While, therefore, the amendment would be workable, I do not think that it is as effective as the provision that we have sought to import into the law. If the noble Baroness proposes to read what I have said, I hope that on this occasion she will withdraw the amendment.
Viscount Thurso: My Lords, before the Minister sits down, perhaps I may take what he said as an assurance that where there is a contract with either an agent or a principal, and one of those persons fails to pay the minimum wage, the other person does not become responsible simply by virtue of the fact that they are available.
Lord Clinton-Davis: My Lords, of course not. The liability has to reside with the person who is liable as a matter of law. That is what we seek to assert.
Baroness Miller of Hendon: My Lords, I shall read the words of the noble Lord, Lord Clinton-Davis, with even greater care than I shall read the words of the noble and learned Lord the Solicitor-General, considering the kind words he said about my husband the lawyer. I was not being derogatory about lawyers—far from it. I should not be derogatory about any profession with which my husband is concerned.
We view the agency from an entirely different point of view. The Minister pointed out how the Government view it. Perhaps I may give a purely practical example as someone who has engaged a cleaning agency—let us say, Busy Bees. After a time I got rid of them because every day it was a different worker. I knew not who they were and I did not employ them. My contract was with the agency and it was down to the agency not only to pay the wages but also the income tax. I believe that the provision will turn the meaning of "agency" on its head.
10 p.m.
Lord Clinton-Davis: My Lords, I am grateful to the noble Baroness for giving way. She is saying that she was clear, as a matter of law, that the contract she entered into in those circumstances was with the agency.

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I do not deny that that occurs. I am saying that one has to be specific as to whom the contract is with: who is responsible for paying the national minimum wage?
Baroness Miller of Hendon: My Lords, I believe that when one has a contract with an agency, the agency is responsible and not the principal. However, as always, I shall read carefully the speech in Hansard, taking note of the response which the Minister gave to the noble Viscount, Lord Thurso. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 52 not moved.]
Clause 41 [Power to apply Act to individuals who are not otherwise "workers"]:
[Amendment No. 53 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 54:
After Clause 44, insert the following new clause—
FAMILY BUSINESSES
(" . A person who is employed by his spouse, parent or child, or by a private limited company of which his spouse, parent or child is a substantial (but not necessarily a controlling) shareholder, does not qualify for the national minimum wage in respect of that employment.").
The noble Baroness said: My Lords, in moving Amendment No. 54, I shall speak also to Amendment No. 55. I said on the previous occasion that I was disappointed with the Minister's response to Amendment No. 54. Having carefully read what the Minister said, as I promised I would, I have brought it back for your Lordships' further consideration.
In his response to me, the Minister referred to the drafting history of this amendment. Frankly, at that time I could not see the relevance of that because what the Committee had to deal with was only the final version. But his observation on that point and his subsequent remarks lead me to believe that he and the Government have misunderstood the whole philosophy behind this new clause.
It is true that in the other place the amendment was restricted to proposals to exempt spouses. Of course, I was not consulted about the amendment at that stage. But with my own experience both as someone who has managed a rather large family business for some 17 years and as someone with a long and close connection with a small business bureau, I know that many small businesses are not merely run by husbands and wives but that children often work in their parents' businesses and sometimes vice versa. Incidentally, for some reason or other, the Minister thought that I was talking about small children. Of course, that was not the case.
After I tabled the amendment, I continued to reflect on the problems of small businesses, something which I believe the Government have singularly failed to do in relation to this Bill. Passing a local newsagent, I noticed from its sign board that it was operated by a limited company. A huge number of limited companies—in fact, the vast majority of those trading in Britain—are run by members of the same family or by what are in
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reality partnerships. To my mind it would be unfair if the wife of Mr. Smith were exempted from the national minimum wage, whereas Mrs. Smith, the wife of the principal shareholder of Smith Limited, were not. That is why I closed up the last loophole; not in order (to quote the Minister) to make the matter as complicated as possible.
It is clear that the Minister may well have misunderstood the objectives of the clause. It is not to exclude as many people as possible, as he put it. It is, however, to exclude a group of people in whose private affairs the Government have absolutely no right or reason to interfere. We are not discussing total strangers becoming employees of some person with whom they have no connection outside the relationship as employer or employee. We are discussing people in the closest possible relationships known to the law; relationships which would exist irrespective of family businesses in which they were both working. I refer to a family business where they could have been partners except for the fact that for whatever reason the business is registered in the name of only one of them. These are not cases where the relationship of employer or employee is intended to be created.
In the old, less politically correct days, that relationship used to be called "master and servants". If we were still unfortunate enough to use that phrase, perhaps the Minister would have better understood the difference I was getting at. In these family employment cases, despite whoever is regarded as the owner of the business, for the purposes of income tax, rates, liquor licences, signing leases and so on, they often operate so as to pay the family household expenses without anyone receiving a formal wage. Sometimes a nominal wage is put through the books in order to take advantage of tax allowances. The essential point is that in reality the spouses or the parents or the children do not regard themselves as employees as such. But the definition of "employee" in Clause 1(2) is, of course, wide enough to catch them.
On various occasions in our debates the Minister has sought to refer to a contract of employment as if that is necessarily some formal written document, but I do not believe that it has to be. The employer is supposed to give the employee,
"a written statement of particulars of employment",
in accordance with Employment Rights Act 1996. However, that provision is often more honoured in the breach than in the observance. The contract between the employer and the employee exists whether or not the employer has complied with his obligation to furnish written details.
I believe that the Government cannot have it both ways. Either spouses, children or parents are not employees merely because they work in the family business—in which case why will the Government not agree to make that clear beyond all doubt by saying so in the legislation?—or the Government contend that they are employees and that they claim the right to interfere in the purely domestic arrangements of very close relatives—interference which, by the actions of an over-zealous official whom the Act describes as an

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"enforcement officer", could result in someone being penalised and acquiring a criminal record because he failed to give his wife sufficient house-keeping money. That interference will simply result in the bureaucratic process of transferring money from one family pocket to another, with of course the Inland Revenue and the Contributions Agency taking a large bite out of it in the process. There is part of the reason for the Government's intransigence over logical requests for exemptions from the operations of the Act.
The Treasury stands to gain considerable sums of money from the stringent effects of the legislation. The amendment is not intended to create exemptions just for the sake of doing so; its intention is to exclude from the Act people who I do not believe should have been caught by it in the first place. The Government must either say that the state definitely intends to interfere in private arrangements between close relatives, or they must say that they have no such intention and concede that the very carefully drafted amendment would prevent this from happening.
I now turn to Amendment No. 55, which involves precisely the same principle as Amendment No. 54. The majority of limited companies are controlled by their directors; in other words, the company which employs the directors is owned by the directors. I shall return to the employment aspect in a moment. What the Government are trying to do is to tell a director how much he should pay himself. If the directors decide that for some reason they cannot afford to pay themselves during a particular pay reference period, or if they decide for some reason that they do not want to pay themselves, they should not have to do so. It is a free country—or at least it used to be before this legislation was introduced. However, if an enforcement officer discovered that the directors were committing the heinous offence of not transferring their own money from one of their pockets to another, it could bring the whole panoply of the enforcement procedures down on their heads.
I turn now to the question of whether a director of a company is an employee. When speaking on the point in Committee, the Minister said that,
"a director of a company … would not normally be entitled to receive a national minimum wage because the legal status of the director … is that of an office holder".—[Official Report, 22/6/98; col. 59.]
However, with the greatest possible respect, I believe that to be a totally specious argument. There is absolutely no reason why the status of being an officer of a company means that someone cannot simultaneously be an employee.
I notice that the Minister did not cite any authority, whether judiciary or statutory, for that statement. However, on the other hand, I did cite an authority; namely, the Secretary of State for Trade and Industry v. Bottrill. Despite this being a case involving his own department, the Minister said that he was not familiar with it. In the month that has passed since the last debate, I hope that the noble Lord has had a chance to look into the matter. The point is that this is the latest in a long line of cases which say that a director is an employee. Even noble Lords who, like me, are not
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lawyers will recall seeing innumerable reports in the press of directors going before employment tribunals complaining of wrongful dismissal. They were able to do so precisely because they were employees.
The Minister went on to claim that the definitions in Clause 54 make it clear who is covered by the Bill; indeed, that is so. In Clause 54(1) it says that an employee,
"means an individual who has entered into or works under … a contract of employment".
Moreover, subsection (2) says that a contract of employment,
"means a contract of service … whether express or implied, and (if it is express) whether oral or in writing".
Noble Lords should note the words "express or implied", and whether or not the contract is in writing.
The Minister conceded that a director who is an employee of his own company could claim the national minimum wage from that company. I admire his courage in making that point. I would certainly not have dared to advance the argument that a director who had decided to forgo his salary could or would, schizophrenically, lodge a complaint against himself with an enforcement officer. The Minister also conceded that a director who is the employee of his own company may claim other employment rights. Precisely, but the fact is that every director, as I have already pointed out, is an employee as well as being the holder of an office.
The Minister finished his remarks by inviting me to read them carefully. I always pay rapt attention to every single word he utters. I am sorry the Ministers are talking because I very much want them to know that it is rapt attention that I pay to every single word of wisdom that they utter. That is why I was utterly astounded by the Minister's final point, so much so that I could hardly believe my ears. That is why I did not respond on the spot but waited until I was able to read his comments. He said that he could not envisage an enforcement officer taking action against a director employee who did not pay himself the national minimum wage. We are not in the business of passing laws involving criminal sanctions and then approaching the responsible enforcement authority, "Nudge, nudge, do not take any action over this". That is an astounding proposition. If the Minister concedes, as he clearly does, that an anomaly could arise, or that there is a potential ambiguity, or even that there is merely scope for misunderstanding, it is Parliament's job, and the Government's responsibility, to see that it is corrected.
Lord Clinton-Davis: My Lords, I am obliged to the noble Baroness for giving way. It is not unknown to the criminal law even where the law is very specific, for the prosecuting authorities to exercise a discretion in all the circumstances.
Baroness Miller of Hendon: My Lords, that is correct, but it is not normally the case, before a Bill is passed, and while we are debating it, when I talk about a factor that could cause problems, for someone to say that the chances are that that will not be dealt with

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anyway. One does not know whether that will or will not occur until one knows all the circumstances of the case.
I was saying that if the Minister concedes—as he clearly does—that an anomaly could arise, or that there is a potential ambiguity, or even that there is merely scope for misunderstanding, I believe it is Parliament's job, and the Government's, to see that that is corrected before the Bill is passed (that is the point I was making to the Minister) because afterwards it is too late. My Amendment No. 55 addresses that point. I beg to move.
Lord Haskel: My Lords, the amendment of the noble Baroness would exclude family members from entitlement to the minimum wage. I think that was the point of her argument. We discussed this at some length in Committee. Our objection is that it goes entirely against the thrust of the Government's philosophy and of the Bill. This amendment appears to be yet another example of the Opposition's keenness to exclude as many categories of worker as possible from the minimum wage. Our wish is to include as many people as possible.
The amendment raises issues about the nature of ownership and control and whether a person is a substantial or a controlling shareholder. As regards the Bill, that is something of a red herring. The Bill is founded on the basis of whether or not a person is a worker, not whether he is in control of the business or is a family member. The status of shareholders, or family relationships, have absolutely nothing to do with it. It all boils down to a quite simple principle that a worker should be entitled to the minimum wage, whoever he or she has as his employer.
In particular, I see no reason why a person should be disenfranchised from the minimum wage just because the employer is his or her spouse, father, mother, niece or child, or whatever. However, it all depends on the nature of the relationship. If the family member is a worker, he or she will qualify for the minimum wage. If he or she is simply helping out on an informal basis, that is unlikely to form the basis of a worker's contract. As I said, we wish the Bill to be inclusive, not exclusive. It is a fair and sensible way to proceed. That is why we opposed the amendment previously, and why I recommend that the House reject the amendment on this occasion.
The question of directors was discussed at some length in Committee. The Government have not changed their view, which is clear. Under the Bill, a person who is a director of a company, limited or otherwise, will not normally be entitled to the national minimum wage. But that is because of the legal status of the director. Whether it is a small business—for example, the corner shop of which the noble Baroness is so fond—or a multi-million pound business, the director is an office-holder.
It is possible to be both an employee and a director. There may be many cases where a director additionally has a contract of employment with the business. That may be explicit or implicit. In this case, he or she would also be an employee of the company and would therefore be entitled to the national minimum wage. But that entitlement would be the result not of being a director but
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of being an employee. That may apply, for example, to some managing directors or directors who are "one-man bands" in charge of their own business.
The Bill is clear in its effect. Directors who are simply office-holders will not be entitled to the minimum wage, and directors who are employees will be entitled to it. The distinction derives from existing employment law.
That is an important point. The Bill relies at heart for its main definition of "worker" in Clause 54 on the approach taken by existing employment law. In the Bill we have tried to follow that. Much of the legislation, including the Employment Rights Act 1996, was introduced or maintained by the previous Conservative administration. I am therefore puzzled as to why the noble Baroness makes continuous efforts to change, or at least appears to call into question, the previous position of people under the Employment Rights Act 1996.
The amendment is therefore not necessary. The definitions in Clause 54 make it quite clear who is covered by the Bill. Where directors are not workers, they will not be covered; where they are workers, they will be covered.
I hope that the noble Baroness will consider this matter of principle and will withdraw her amendment.
10.15 p.m.
Baroness Miller of Hendon: My Lords, I shall certainly withdraw the two amendments that I have spoken to. However, I did not agree with the Minister's remarks. I am surprised that he did not comment on the case on which I asked him to comment; namely, Secretary of State for Trade and Industry v. Bottrill, which I believe refutes what he said. I totally accept that the noble Lord, Lord Clinton-Davis, was not in a position to comment previously. However, I thought that within the month I might receive a satisfactory answer. I suggest that the Minister looks up the case when this matter arises again at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 55 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 56:
After Clause 44, insert the following new clause—
EXCLUSION OF DISABLED PERSONS AND EMPLOYMENT FOR THERAPEUTIC PURPOSES
(" .—(1) The Secretary of State may, after consultation with the Low Pay Commission, make an order exempting disabled persons from the provisions of this Act.
(2) An order under subsection (1) above shall provide for the issue of permits by the Secretary of State to those persons whom he believes to be disabled and may make provision for—

(a) the procedure for applying for and issuing such permits;

(b) the procedure for establishing the minimum wage to which each permit holder shall be entitled (being less than the single hourly rate prescribed under section 1(3) of this Act);

(c) the appointment by the Secretary of State of suitably qualified persons to assess such applications; and

(d) the procedure for appealing against a refusal to issue such a permit.

(3) No person shall be guilty of an offence under this Act in respect of an employee who holds a permit issued in accordance with an order made under this section.
(4) For the purposes of this section, a person is disabled if he is so affected by physical injury or mental deficiency or infirmity due to age or any other cause as to be incapable of earning the national minimum wage.
(5) A person whose employment is primarily undertaken for the purpose of therapy and whose employer is a non-profit-making organisation does not qualify for the national minimum wage in respect of that employment.").
The noble Baroness said: My Lords, the wording of this amendment is slightly different from that of the one I introduced in Committee. The difference is that I have used the word "disabled" in place of "incapacitated".
Representations were made to me by the noble Lord, Lord Rix, that the word "incapacitated" is objectionable to disabled persons because it is not representative of the problems that they face. Merely because a person suffers from any sort of disability does not mean that that person is incapable of normal, useful and productive activities. Naturally, I accept the correction. I very much hope that my drafting did not cause any offence.
Knowing the capacity of the noble Lord, Lord Clinton-Davis, for compassion, I could not understand his rejection of my amendment, which he agreed related to a difficult issue. We were arguing diametrically opposite cases, but with the same objective: to assist disabled workers. On reading his arguments in Hansard, I think I have discovered the reason. It is the classic conundrum of whether a glass is half empty or half full. The noble Lord saw it as a risk of discrimination, although he was gracious enough immediately to acquit me of any such intention. He said that it could,
"deny the minimum wage to the very people who are most in need of its protection".—[Official Report, 22/6/98; col. 65.]
I, on the contrary, see it as an opportunity for disabled people who would otherwise find it impossible—at the very least difficult—to obtain work to do so.
This amendment is not designed as a licence for what the Government call unscrupulous employers whom they see lurking round every corner and ready to exploit vulnerable people. I was amazed when previously the noble Lord, Lord Clinton-Davis, commented on the fact that I kept saying that the Government regarded employers as unscrupulous. I suggest that, if the noble Lord has time, he should read the debates on some of the other amendments as carefully as I have done and count how many times unscrupulous employers have been referred to.
Lord Clinton-Davis: My Lords, the point I was trying to make was that if everyone in this world was scrupulous we would not require legislation. Most legislation is designed to deal with those people who, ambitiously and deliberately, set about avoiding legal provision. That is why it is necessary to have laws. It is as simple as that. It is the unscrupulous who disadvantage the scrupulous employer by seeking an unfair advantage.
Baroness Miller of Hendon: My Lords, I accept the noble Lord's reasoning for the word, even if I do not
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necessarily agree with it. The amendment provides the opportunity for sympathetic employers to lend a hand to people with disabilities by enabling them to do a useful and satisfying job, to earn some money of their own instead of relying on state handouts and at the same time to build their own self-esteem.
In his response the Minister quoted selectively from the report of the Low Pay Commission by referring to paragraph 1.6, which said that a majority of witnesses, including the Government, saw no justification for an exemption or a lower rate of national minimum wage for disabled persons. As regards the Government's evidence, they are opposing this amendment, so I expect that that is what they would say. On the other hand, the Minister did not comment on the paper published by the Joseph Rowntree Foundation, published ahead of the Low Pay Commission's report, which I quoted. I remind your Lordships that it said:
"Disabled people may have been affected by a wider and systematic shift in employment patterns. As the supply of labour has expanded employers have become more selective in their choice of staff. Marginal workers such as disabled have been excluded … preliminary evidence suggests that very few have found a job".
The Minister also disregarded the evidence, reported on page 39 of the Low Pay Commission's Report, of the Royal National Institute for the Blind. The institute said:
"Blind and partially sighted persons face bleak prospects in employment".
It goes on:
"Significantly, blind and partially sighted people are concentrated in lower paying, semi-skilled, unskilled and routine manual occupations … Many blind and partially sighted people are therefore caught in poverty even when in work".
I do not understand how the Government can believe that putting another obstacle in the way of disabled people obtaining employment will help them.
I believe that the Government have totally misunderstood the purport of my amendment, which is far more detailed than the one that received perfunctory attention in the other place. I hope that, despite the Minister's very heavy workload, he has had time to consider and reflect on the detail of what I proposed in my amendment and which I explained in Committee. I am emphatically not proposing a blanket exemption from the national minimum wage for disabled persons en masse. This clause provides for an exemption for individuals on a case-by-case basis. Each request for exemption will have to be initiated by the employee, not by the employer or potential employer. Each case will have to be examined on its own separate merits. The Secretary of State will make regulations to prescribe the criteria to be applied in deciding whether exemptions should be granted. I suggested that the procedure should be conducted by those expert assessors who already decide about disablement benefit. But that would be for the Secretary of State to decide. What the doctor or other assessor would be looking at is an applicant who says, for instance, "My disability prevents me from working for more than a few hours a day" or "I cannot go to work more than an odd regular day" or "I can only do limited tasks, but I would like to get a job from a sympathetic employer who is prepared to take me on despite my problems".

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We must recognise that many such employers would be willing to employ disabled persons as a commendable social duty. So why should those employers not pay the full national minimum wage? Of course, there is nothing to prevent them from so doing, but human nature being what it is, they in turn may face problems with their other employees—"Why should he be paid the same wage as me when I do more work, produce more widgets in a day or do not need so much time off?" Nothing in the clause requires a disabled person to take a job at an unacceptable wage. Nothing in the clause enables an employer to recruit an employee at a rate lower than the national minimum wage unless that employee has himself obtained an exemption after a stringent assessment procedure.
Finally, I turn to subsection (5), which deals with persons whose work is primarily undertaken for therapeutic purposes with a non profit-making purpose. We are talking of disabled people living in community homes, staying in hospital or attending some kind of day centre. They can often do jobs—frequently handicrafts, but sometimes small industrial applications. The work they do is partly to help them overcome their disability. Pay is not necessarily the prime consideration, though it is a factor in establishing the self-esteem of the worker who is possibly, simultaneously, a patient.
I told the Committee of my experience on a visit to a community home for people—mostly adults with learning difficulties—where I was presented with a vase made by one of the residents who spent his time working in the pottery shop. The shop sells the products to visitors to provide extra comforts for the residents. If the community home had to pay them a commercial wage for work which has no real commercial value, it would simply have to discontinue that operation. That would be to the considerable detriment of the residents who would then have to spend their time watching TV.
My noble friend Lord Oxfuird is not able to be present today. If he had been, he would have told your Lordships of a letter he received from the Enham Trust—a charity with which he works for those suffering from cerebral palsy. The national minimum wage would be to the disadvantage of disabled workers and may impose extra financial burdens on the excellently supported employment programme administered by the Employment Service Department.
In closing their ears to our request for disabled persons to be exempted, if they individually ask to be, do the Government realise the wider implications of that action? This is one case where the Government cannot produce their usual scenario of an attempt by some unscrupulous employer to evade the Act. The qualification is that the employer providing therapeutic work must be a non-profit-making organisation. Similarly, no part of the first four subsections will enable any employer to evade the Act. It will not affect a disabled person unless he and nobody else applies for the exemption. He will not obtain that exemption unless it is granted after careful appraisal by a qualified assessor using the same criteria as apply to evaluating a person's disability for other purposes. It is entirely to the advantage of the employee and nobody else. For the Government to continue to refuse to agree to the
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exemption will condemn numerous disabled people to exist, often for life, on benefits doled out by the DHSS offices instead of the benefit of useful and fulfilling work.
The noble Lord, Lord Rix, is also not in his place. I saw a copy of the letter he wrote to the Minister as chairman of MENCAP—the organisation that he leads with such distinction. I believe it is a fair reading of his letter that MENCAP would not wish in any way to become involved in what it sees as a political dispute—and that is quite right in view of its charitable status. He shares the Minister's view which I have already quoted; that is, that the pay of the disabled is a difficult issue. He reminded the Minister that MENCAP's evidence to the Low Pay Commission was that in reality the employer is often doing the disabled worker a favour and is not necessarily guaranteed to do so if the cost is doubled. He pointed out that even low wages were far better than the derisory sums they received at some day centres.
The noble Lord, Lord Rix, posed two questions to the Minister, of which I only wish I had been the author. So I repeat them myself because they require simple, straight answers, yes or no. First, are the Government suggesting that all arrangements for disabled workers below the national minimum wage should become illegal and that this is the necessary price of progress for the wider constituency of low paid workers? Secondly, is not the function of the national minimum wage to lay down some rules at one end of the spectrum and not to rule out provision at the other end of the spectrum? The noble Lord, Lord Rix, said that he did not wish to undermine the national minimum wage. Well, I admit that he and I do not see eye to eye on the worth of this politically doctrinaire piece of legislation. But he also said that he did not wish to undermine jobs which are of importance to those disabled persons who have them but which are not viable at the national minimum wage levels. The noble Lord, Lord Rix, asked the Minister to help him; and so do I. I beg to move.
10.30 p.m.
Viscount Bridgeman: My Lords, in supporting my noble friend Lady Miller in her amendment, perhaps I may further refer to the findings of the Low Pay Commission. In Committee, the noble and learned Lord the Solicitor-General quoted the Low Pay Commission:
"Moreover, for those people with severe disabilities that limit their productivity, the Government funds the Supported Employment Programme which helps employers recruit and maintain these workers in jobs".—[Official Report, 22/6/98; col. 65.]
That is all very fine in theory and we must indeed pay regard to the Low Pay Commission's findings. But what are the practicalities? We are looking at a small firm. There will be a good deal of ill-affordable time tied up in getting the various subsidies available and almost certainly they will come after the wage has been paid, so there will be a cash flow problem for small firms. The result will be that employers with the highest intentions will say, "This is not worth the candle", and a disabled person will lose that chance of a job. That must be of concern to every Member of your Lordships' House.

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How much simpler it would be if we could go straight to the problem so that, as my noble friend outlined, each case was individually dealt with? We are not talking about a sweat shop composed of disabled people. This issue is not sectional and is not political. It is of the highest public concern. I urge the Minister to think again about making an exemption for this disadvantaged group of people.
Lord Falconer of Thoroton: My Lords, in Committee we discussed an almost identical amendment. The noble Baroness has indicated why it is not identical. I entirely respect her reasons for changing it, but it has the same effect. It is a fundamental principle and one that we would all share that disabled people should not be discriminated against in the workplace. I appreciate that that is not the intention of the amendment; rather it is to allow a permit system to operate allowing partial exemptions on the basis of incapacity and to exempt those who work for therapeutic reasons. The amendment risks discrimination, although that is not its intention. It invites us to distinguish between the able bodied and those who are, to quote her amendment,
"incapable of earning the national minimum wage".
With respect to the noble Baroness, that is a loose and difficult concept. In practice, the amendment could lead to the totally unacceptable situation where some people are denied the minimum wage when they have just as much right to it as anyone else. It could easily become the thin end of a very large wedge, denying the minimum wage to the very people who are most in need of its protection.
Perhaps I may refer again to what the Low Pay Commission had to say on these points. I do not make any apology for returning to this part of the report on such an important matter. It faced up to the issue. We all recognise that it is a difficult issue and we all recognise that it is an issue on which we want to come to the right conclusion. Having taken considerable evidence, the Low Pay Commission stated at page 14, paragraph 1.6 of its report,
"We believe that there are compelling arguments for treating disabled workers in the same way as other workers. To do so recognises the value of disabled workers to employers and supports a culture of social inclusion".
I believe that is what we all have in mind. The noble Baroness, Lady Miller, then referred to page 39, paragraph 3.15. The relevant part of that report states,
"Blind and partially sighted people face bleak prospects in employment. In addition to the barriers to securing and retaining paid work there is extensive discrimination in work. Significantly, blind and partially sighted people are concentrated in lower paying, semi-skilled, unskilled and routine manual occupations, and fewer are employed in professional and skilled occupations. Many blind and partially sighted people are therefore caught in poverty even when in work".
I see absolutely no reason why such people should not have the protection of the national minimum wage. I think it is not appropriate that, because it can be argued that they could fall within the definition of somebody incapable of earning a minimum wage, they should not
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be treated exactly like those who are sighted. They are just as strongly entitled not to be exploited as everybody else.
Why did the commission arrive at the clear conclusion that it did, the conclusion that I believe the noble Baroness accepts it reached? It is because it recognised the overwhelming rightness of the case. It notes that, although a "small minority" of those who gave evidence had suggested exemptions or lower levels for the disabled, the vast majority saw no justification for that.
I believe that it is highly significant that the commission's very wide ranging consultations did not report any support for the type of arrangements proposed by this amendment. Yet the commission received views from several organisations representing or with interests involving the disabled. Perhaps I may mention who they were. They were, the National Advisory Council on Employment of People with Disabilities; the National League for the Blind and Disabled; the Royal Society for Disability and Rehabilitation; the Royal National Institute for the Blind and the Royal Society for Mentally Handicapped Children and Adults. What are their views on the noble Baroness's proposals? They all gave evidence to the Low Pay Commission, which rejected the idea of any sort of amendment along the lines suggested by the noble Baroness. It is a difficult issue and we have to come to the right conclusion on it. We have thought about it a great deal. The weight of opinion is against this sort of amendment, but if the noble Baroness tells us that these bodies thought we were wrong, they should tell us.
The question of therapeutic earnings is a separate point. The commission's report points out that, for those with severe disabilities that limit their productivity, the Government fund a supported employment programme which helps employers recruit and maintain these workers in jobs. The noble Viscount, Lord Bridgeman, said that that was all very well in theory, but what about the practice? The supported employment programme helps about 22,000 people with severe disabilities who can work but who are unlikely because of their limited productivity to get or keep jobs in open employment.
Government funding is being maintained at over £155 million for 1998–99. In my book that is going a lot further than simply putting forward theoretical ideas. It is a very practical way of helping the people who are most concerned. Anyone working on a voluntary, unpaid basis will be exempt in any case as a result of Clause 44, which is the clause dealing with voluntary workers. We have thought about it and we very much hope that the noble Baroness will consider the matters I have referred to in relation to these amendments and will withdraw the amendment advanced and not move the others.
Baroness Miller of Hendon: My Lords, I agree with the noble and learned Lord that this is a very sensitive issue. It is clearly a very difficult one. As I believe I said

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when I moved the amendment, we both want exactly the same on both sides of the House, but it is simply that we believe there is a different way.
Lord Clinton-Davis: My Lords, perhaps I may allude to the letter to which the noble Baroness referred and of which my noble and learned friend the Solicitor-General was not aware. I have not seen that letter. I note that it is not dated. I am grateful to the noble Baroness for making a copy available. I shall, of course, make investigations into the matter, but I am informed by my officials who are present tonight that they have not seen the letter either. I shall find out from my private office whether it has been received. There may be a simple explanation, but I shall certainly look into it.
Baroness Miller of Hendon: My Lords, I am sure that there will be a simple explanation. I am certain that both sides of the House share the view that this is a difficult issue. We think that our way is better, but I take support from the fact that the Minister has said that the Government have gone into this carefully and that they believe that their way is right. I hope that it is. Indeed, I am sure that if time should show that it is not right, the Minister will ensure that his Government come back with some alterations to the provisions. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 57 not moved.]
Schedule 1 [The Low Pay Commission]:
[Amendments Nos. 58 and 59 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 60:
Page 36, leave out line 26.
The noble Lord said: My Lords, in moving Amendment No. 60, I should like to speak also to Amendments Nos. 61 and 62. This is a technical drafting amendment which is designed to avoid wording that some might regard as offensive. Perhaps I may take a moment to explain what this is all about.
Paragraph 1 of Schedule 1 relates to membership of the Low Pay Commission. Paragraph 1(6)(b) as currently formulated permits the Secretary of State to dismiss a member of the Low Pay Commission who is,
"incapacitated by physical or mental illness".
I believe that it is as well to avoid that particular formulation. Instead, the three linked amendments achieve the same result as the original intention, which is to ensure that the Secretary of State can terminate the duties of any Low Pay Commission member who, for whatever reason, is unable to carry out his functions as a member. I hope that the House will be able to support the amendments. I beg to move.
On Question, amendment agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendments Nos. 61 and 62:
Page 36, line 29, leave out ("who") and insert—
("(d)").
Page 36, line 29, leave out ("otherwise").
On Question, amendments agreed to.
[Amendment No. 63 not moved.]
Schedule 2 [Amendments relating to remuneration etc of agricultural workers]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendments Nos. 64 and 65:
Page 41, line 26, leave out from ("1998") to end of line 30.
Page 46, line 29, leave out from ("1998") to end of line 33.
On Question, amendments agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 66:
Page 46, line 43, leave out ("Act") and insert ("section").
The noble Lord said: My Lords, this is a purely drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 67:
Page 51, line 31, leave out from ("1998") to end of line 35.
On Question, amendment agreed to.
House adjourned at sixteen minutes before eleven o'clock.